NEW YORK • Goldman Sachs Group, the worst performer in the Dow Jones Industrial Average this year, reported a 60 per cent drop in profit as first-quarter revenue fell to the lowest since chief executive officer Lloyd Blankfein took the top post in 2006.
Net income declined to US$1.14 billion (S$1.53 billion), or US$2.68 a share, from US$2.84 billion, or US$5.94, a year earlier, the New York-based company said in a statement yesterday. Goldman Sachs' revenue fell 40 per cent to US$6.34 billion, missing the average estimate of US$6.69 billion.
Mr Blankfein is trying to ride out a years-long bond-trading slump that has been compounded by market swings and stiffer regulations - challenges that forced many competitors to scale back.
He has embarked on the biggest cost-cutting push in years, following his largest competitors who have turned to expenses as the only lever to pull in an environment of weakened revenue.
Operating expenses fell 29 per cent from a year earlier to US$4.76 billion.
Mr Blankfein's cost reductions, discussed by people with knowledge of the plan last week, will include dismissing more support staff; rejecting bankers' spending on airfare, hotels and entertainment unless it directly serves clients; choosing not to fill open positions; and spending less on printing pitch books or brochures.
The question is whether cost-cutting, either in the first quarter or over a longer time period, will be enough to satisfy investors.