Goldman Sachs to sack 10 per cent of workforce

Gives LinkedIn $22.7m

By Austin Modine • Get more from this author

Posted in Financial News, 23rd October 2008 22:13 GMT

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Another sign less funding will be flowing through Silicon Valley: Goldman Sachs getting ready for some serious belt-tightening.

The financial firm today said it plans to cut 10 per cent of its 32,569 employees worldwide. That should mean layoffs for about 3,260 workers.

Goldman Sachs is widely considered to have navigated the credit crisis better than other banks. Last August, it insisted headcount would rise by a single-digit percentage this year.

Now mergers have come to standstill and there hasn't even been an initial public offering in 11 weeks. The Wall Street Journal reports the layoffs reflect weakness in investment banking and trading.

The firm recently transitioned from independent investment firm to a holding company supervised by the Federal Reserves. That potentially gives Goldman more stability, but also encourages taking less risks.

Perhaps somewhat encouraging for tech entrepreneurs is Goldman's participation in a $22.7m round of funding for business-oriented social networking site LinkedIn. Other investors included SAP and McGraw-Hill.

LinkedIn CEO Dan Nye told the WSJ the company wants to "have the strongest balance sheet possible" to make acquisitions and other opportunities.

But keep in mind the funding closed before the market crashed last month. This could just be a last gasp before fundraising gets rougher. ®

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