GS Goldman Sachs Group Inc

By Liz Hoffman 

Goldman Sachs Group Inc. plans to lay off more than one-quarter of its investment bankers in Asia amid a slowdown in deal activity in the region, according to people familiar with the matter.

The layoffs will be concentrated in Hong Kong and Singapore and won't affect the bank's operations in Japan, the people said.

It is a notable retreat for Goldman, which has made a big push in Asia in recent decades. Former Chief Executive Henry Paulson, who later became Treasury secretary, courted Chinese leaders and helped open doors for Goldman's bankers, who spent years cultivating ties with the region's ascending private sector.

But the region remains far less profitable for the bank than the U.S. and Europe. China's economy has slowed and its stock market has been volatile, with wild swings last year that effectively killed what had been a lucrative business for Goldman and others in underwriting initial public offerings.

Regional IPO volume, excluding Japan, is down 16% this year over last year, according to Dealogic.

Mergers are down 23% by dollar value from 2015, and high-yield and investment-grade debt offers have both fallen by double digits, according to Dealogic.

A Goldman spokesman declined to comment on the layoff plans, which were earlier reported by Reuters.

Goldman and other banks have been reducing head count as they look to rein in costs and convince investors they can be disciplined. Earlier this year, Goldman quietly moved to shed about 2,000 jobs, about 6% of its workforce, which it says would save $700 million a year.

The Asia layoffs are separate from that effort, the people said.

Write to Liz Hoffman at liz.hoffman@wsj.com

(END) Dow Jones Newswires

September 26, 2016 02:47 ET (06:47 GMT)

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