Published November 13, 2012
NEW YORK – Goldman Sachs Group Inc is deploying more information technology to handle trades and manage its capital as the firm cuts its payroll, CEO Lloyd Blankfein said on Tuesday.
The firm is hiring additional technology workers while cutting its total payroll, Blankfein said at an investor conference. Total staff at the investment bank was down 8 percent at the end of September to 32,600 people from 35,500 in June 2011, he said.
Goldman has deployed technology systems to show the impact of buying, selling or holding individual securities on regulatory measurements of bank assets. The information is being used to improve Goldman's capital strength as measured under new standards being imposed by regulators, he said.
At the same time, trading currently done with "high touch" by individuals will increasingly be done with computers. Roughly 65 percent of the firm's equity trading for clients now goes through what Goldman calls "low touch" electronic channels, he said.
In response to a question, Blankfein said he "would be shocked" if federal government officials do not to find a solution to the approaching Federal fiscal cliff when tax rates are scheduled to spike and government spending plunge on December 31.
He said, however, that the Goldman expects a lot of uncertainty about the outcome of talks in Washington before a deal is reached. "We are at least braced for a ride here," Blankfein said. (Reporting by Lauren Tara LaCapra and David Henry in New York; Editing by Marguerita Choy)