NEW YORK, June 15 (Reuters) – Goldman Sachs Group Inc’s (GS.N) managing directors were invited to meetings this month to receive an ominous message: take even more painful steps to cut costs, according to four sources familiar with the situation.
Belt-tightening on the agenda for meetings of Goldman’s top executives is another sign that the firm’s ongoing push to cut $1 billion in costs is now accelerating as managers target smaller and smaller line items and contemplate more job cuts, sources said.
Previously, employees were able to spend on subscriptions for websites that provide data and information. They could book a business trip to see one client and expense pricey meals. Now senior managers are needed to sign off on expenditures and travel requires seeing multiple clients, the sources said.
If revenues don’t bounce back alongside the aggressive cost-cutting measures, more employees can expect to be laid off this year, one of the sources said. The bank has let go of 3,700 employees since September.
Managing directors will also be given goals for budget reductions and be held responsible for delivering them, one of the sources said.
“We have repeatedly emphasized our focus on expense management in this environment, and are delivering on the $1 billion plan we laid out at investor day to drive efficiencies and deliver for shareholders,” a Goldman Sachs spokesperson said in a statement.
The latest round of penny-pinching comes as Goldman Sachs management grew more pessimistic about an economic recovery and dealmaking this year. Investment banking revenue for the industry is so far down nearly 46% in the second quarter from same quarter a year earlier, preliminary data