The Goldman Sachs group would be removing 30 per cent of its Asian investment bankers after a regional slowdown grips the financial giant.
The bank is also trying to improve returns to shareholders after pressure directed towards its upper management yielded policy changes.
About 90 investment bankers in Asia, particularly Southeast and South Asia, would be laid off in the next few months.
Profits failed to come in steadily for the bank as Hong Kong and Chinese Mainland companies secure the former’s financial hubs. The top 10 positions for financial advice in Hong Kong belong to Chinese securities companies.
Goldman Sachs is also returning on equity after it had dipped below 10 per cent in each of the past four quarters.
The bank is currently struggling with a combination of higher capital requirements and regulations-curbing risk-taking.
Meanwhile, rival Morgan Stanley is also facing the same pressure. An activist shareholder is inciting new radical measures that would help the bank boost the profits it needs.
Executives have a strong personal interest in lifting returns. Goldman’s top trio — chief executive Lloyd Blankfein, chief operating officer Gary Cohn and chief financial officer Harvey Schwartz — need to achieve an average ROE of 11 per cent between 2016 and 2018 if they want to receive 100 per cent of their performance-linked pay. Such awards accounted for $7.4m of Mr Blankfein’s $23m package last year.
Goldman has already moved this year to make deeper cuts than the usual bottom 5 per cent of staff across the board.