Sep. 27, 2011 at 9:58 AM ET
The turmoil that has hit financial markets, dragging $104 billion out of equity funds from June through August, may also strike a blow at Goldman Sachs' profits, The New York Times reported Tuesday.
The investment bank -- once described as a "vampire squid wrapped around the face of humanity" -- is expected to make deeper cost cuts than the $1.2 billion it initially predicted it would need to take by the middle of next year, the newspaper's "Dealbook" blog reported. It cited people briefed on the situation who were not allowed to speak publicly about it. They told the newspaper that the cuts could rise by $250 million, to a total $1.45 billion.
The cost cutting would be hitting the ranks of its investment bankers harder than initially expected, too: Goldman was already contemplating shedding 1,000 jobs. Besides layoffs, the bank could be slashing pay too, the Times reported, saying that Goldman may have one of its worst quarters since going public 12 years ago.
Even the firm's shrubbery is not immune, the report said:
James P. Gorman, the chief executive of Morgan Stanley, faced questions about plants at a town hall meeting this summer. An employee told Mr. Gorman that he had noticed decidedly less greenery around the office.
“Every dollar we don’t spend is a dollar available for the bottom line,” Mr. Gorman responded.