[ by Melanie Gretchen ]

Goldman Sachs Group will begin its annual job cutting process as early as this week.  Usually this means cutting the weakest 5% of its employees.  But this year, it's not expected that cuts will be evenly distributed among many businesses.

Who's Vulnerable.

• Equities trading, where volumes and earnings are weak, can expect cuts to exceed 5%.  than other units
• Fixed-income trading, which fell last year, but has seen a recovery with better volumes this year, will see less than 5% of its personnel cut.
• Across the organization, however, cuts will approximate 5% of Goldman's workforce.

David Wells, a Goldman spokesman, who declined to comment on layoffs, had this to say about the firm's budget plans:  "As market activity has picked up in certain areas, we remain focused on prudently managing expenses and allocating resources to ensure we are best able to meet our clients' needs and generate good returns for our shareholders."

Goldman CFO Harvey Schwartz attributed layoffs to the need to generate higher returns on equity for shareholders.  Last year, Goldman's Goldman's return-on-equity was 10.7% - better than 2011, but no where near pre-financial crisis highs, where ratios exceeded 30%.  Going forward, Mr. Schwartz said the industry must adapt.

Industry-Wide Cuts.   So as one might anticipate, Goldman is not alone in cuting expenses and, in particular, jobs.  Disappointing revenue figures and heightened regulations have forced Morgan Stanley, Citigroup, Bank of America, UBS AG and others to take a knife to their respective budgets. 

For further details, go to [Reuters, 2/25/13].