Top Firm's Severance Pay Averages $85,000 Per Employee

Oliver Twist

Goldman Sachs reported a $2.12bn fourth-quarter loss Tuesday, after $7.2bn in writedowns which related to commercial-mortgage loans and securities, leveraged loans, real estate and principal investments. The loss was Goldman's first in ten years, when the fall of Long Term Capital Management and the Asia crisis put pay to profits.

And Financial News has reported that Goldman has set aside some $275m for severance costs in the quarter for the 3,250 staff being laid-off in the firm's latest right-sizing initiative. That's a cool $84,615 per employee. The firm said that it  had eliminated some 2,500 jobs in the fourth-quarter.

Bloomberg also reports that Goldman's compensation and benefits pool for 2008 came in at $10.9bn - down 46% from last years record $20.2bn. Pay for the 'average' employee fell 45% to $363,654. Merrill Lynch analyst Guy Moszkowski said that the firm's reduced comp pool is another indication that 'the industry is in the process of repricing its labour pool'.

Goldman CEO Lloyd Blankfein said that his firm's 'fourth-quarter reflect(ed) extraordinary difficult operating conditions, including a sharp decline in values across virtually every asset class'.

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