d on the plan who declined to be identified.

The cuts add to more than 130,000 jobs eliminated in the financial industry since mid-2007, eclipsing the 83,000 lost after the Internet bubble burst in 2001. Paul Kafka, a Goldman spokesman in London, wouldn't comment. Goldman had 32,569 employees at the end of August, up 3 percent from May and 9 percent for the year.

Banks worldwide are shelving deals and cutting jobs as the unprecedented turmoil in credit markets spreads and spurs concern the global economy may fall into a recession. Mutual fund managers including Janus Capital Group Inc. have also begun paring headcount. Goldman, which converted to a bank holding company last month and is receiving $10 billion from the U.S. Treasury, has dropped by almost 50 percent in New York trading this year.

``Downsizing is inevitable due to the fact that Goldman Sachs is now under government control, and is not making as much money,'' Michael Williams, dean of Touro College Graduate School of Business in New York, said in an e-mailed statement. ``These are not the last job cuts you will see'' as the industry consolidates and the volume of work shrinks, he said. ``Simply put, there is a redundancy of people.''

Sinking Revenue

The new job cuts signal a reversal in strategy at Goldman since Sept. 16, when Chief Financial Officer David Viniar told analysts he expected the number of employees to increase by a percentage ``in the low single digits'' this year, excluding the purchase of a mortgage-servicing company.

The firm's revenue for nine months this year slid 32 percent from a year earlier, as investment banking fell 26 percent and trading and principal investment plunged 45 percent. Revenue may drop 38 percent in the quarter that ends in November, according to the average estimate of 12 analysts surveyed by Bloomberg.

Mergers and acquisitions, in which Goldman is the top-ranked adviser for the eighth consecutive year, have declined by almost one third this year, and global equity offerings have tumbled 39 percent, data compiled by Bloomberg show.

The company has booked $4.9 billion of losses on devalued assets such as mortgage securities and leveraged loans, a fraction of the writedowns taken by rivals such as Citigroup Inc., Merrill Lynch & Co. and Morgan Stanley.

Cutting Muscle

``When a lean and mean firm starts trimming, they're cutting into muscle,'' said Shaun Springer, chief executive officer of Napier Scott Executive Search Ltd. in London. ``The fact that they are cutting 10 percent is quite indicative of the fact that there are still a lot of problems ahead.''

Citigroup has cut 24,000 jobs in the past 18 months, more than any other bank in the world, according to data compiled by Bloomberg. Lehman Brothers Holdings Inc., which filed for the largest bankruptcy in U.S. history last month, eliminated almost 14,000 jobs, the data show.

Barclays PLC will cut about 3,000 jobs after its purchase of Lehman's North American investment banking and capital markets businesses, Robert Diamond, president of the U.K.'s third largest bank, was quoted as saying in an Oct. 10 Fortune article. The reductions amount to about 20 percent of the firms' North American employees as of Sept. 17, when the deal was announced.

Further Reductions

Other financial firms are planning further reductions. Merrill Lynch may cut more than 10,000 jobs after Bank of America Corp. completes its $50 billion acquisition of the firm, Ladenburg Thalmann Inc. analyst Richard Bove said this week.

Janus Capital, the Denver-based mutual-fund manager, said today it plans to fire 110 employees, or 9 percent of its workforce, and reduce annual expenses by as much as $45 million after stock market losses and investor withdrawals halved its third-quarter profit.

AllianceBernstein Holding LP, the U.S. asset-management affiliate of French insurer Axa SA, said yesterday that job cuts are ``inevitable'' after third-quarter earnings fell 39 percent on investment losses and client redemptions.

Banks may cut 62,000 jobs in London by the end of next year, reducing employment in the industry to the lowest level in more than a decade as the credit crisis worsens, the Centre for Economics and Business Research estimated this month.

In New York, state budget planners expect a loss of 40,000 financial jobs this year.

To contact the reporters on this story: Joyce Moullakis in London at jmoullakis@bloomberg.net; Christine Harper in New York at charper@bloomberg.net

Last Updated: October 23, 2008 12:11 EDT

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