GS, C cuting jobs - no signs of 'change' as Obama builds team - Wall Street goes on with bonus plans

Goldman is expected to show its first quarterly loss in 9 years by next quarter, which is the most crucial one as investment banks close their year and have to mark to more rigid accounting standards. The job cuts Citi is announcing are pathetic, considering how drastic their balance sheet looks (or rather might look if marked correctly).

Excerpts from Bloomberg:

Nov. 6 (Bloomberg) -- Citigroup Inc. and Goldman Sachs Group Inc., faced with a weakening economy and the prospect of mounting losses, began firing workers as part of the firms' plans to cut more than 12,000 jobs, people with knowledge of the matter said.

Goldman, which converted last month from the biggest U.S. securities firm into a commercial bank, yesterday began telling about 3,200 employees, or 10 percent of its workforce, they were out of a job, according to one of the people who declined to be identified because the decisions were confidential.

Citigroup has been notifying staff this week who are affected by the bank's plan to discard 9,100 positions over the next 12 months, or about 2.6 percent of its headcount, another person said.

Goldman, which employed 32,569 people as of Aug. 29, may report its first quarterly loss next month since the company went public in 1999, according to analysts at Merrill Lynch & Co. and UBS AG. Stock market declines will cause Goldman to write down the value of equity stakes owned by the company in the fourth quarter that ends this month, the analysts said.

No idea how one can change the world if he puts up this type of guys for his core team - let's see who else will be nominated for the 'all-star "change" team'

Excerpt from WSJ:

WASHINGTON -- President-elect Barack Obama offered the key post of White House chief of staff to Rep. Rahm Emanuel of Illinois, the first step in building a team that is expected to take shape in coming days.

Barack Obama

The quick transition from campaign to government shows the urgency of getting up to speed on the worst financial crisis to hit the U.S. since the 1930s, with an economy likely in recession and Congress preparing to take action before Sen. Obama's January inauguration.

Obama aides said hiring a chief of staff would be followed by critical economic appointments, especially that of Treasury secretary.

They said contenders include Lawrence Summers, a Harvard University economist who served in the same position in the Clinton administration; New York Federal Reserve Bank President Timothy Geithner; former Federal Reserve Chairman Paul Volcker; and Robert Rubin, another former Clinton Treasury secretary and director and senior counselor of Citigroup Inc.

Excerpt

http://www.cnbc.com/id/27559114

America Corp | Merrill Lynch & Co Inc

By Charlie Gasparino, On-Air Editor | 05 Nov 2008 | 03:54 PM ET

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Major Wall Street firms are expected to slash annual bonuses for executives an average 50 percent or more, according to senior executives.

Kathy Willens / AP

The move comes as the big broker-banks begin laying off as much as 15 percent of their workforce due to the economic slowdown.

The expected cuts in bonuses not only reflect sharply lower profits at the financial giants. Congress and New York Attorney General Andrew Cuomo are targeting compensation at big Wall Street firms that have received injections of government capital due to the global credit crisis.

Morgan Stanley [MS 17.06 -1.84 (-9.74%) ] is just starting to discuss bonuses, so no firm number is set. But sources there say bonuses will be sharply lower.

Goldman Sachs [GS 87.43 -7.57 (-7.97%) ] is planning the biggest cuts in bonuses, primarily because executives there made the most last year. Senior executives are expected to take a 75 percent cut in bonuses, while less senior executives could see a 50 percent cut.

Goldman CEO Llyod Blankfein—who pocketed a bonus of close to $70 million last year—might not take any bonus this year, sources told CNBC.

At JP Morgan Chase [JPM 39.22 -2.95 (-7%) ], the most successful of the big financial firms, bonuses will be cut 30 to 40 percent.

Goldman, meanwhile, notified roughly 3,200 employees this week that they have been laid off, part of previously reported plans to slash 10 percent of the firm's global work force.

At Merrill Lynch [MER 17.62 -2.37 (-11.86%) ], 10,000 employees could be jettisoned as a result of the merger with Bank of America [BAC 21.75 -2.78 (-11.33%) ]