Guest blogger Rebecca Leber for Think Progress is reporting that Wall Street is planning to lay off thousands of workers in a supposedly underperforming quarter. Yet and still, they have set aside $65.69 billion for bonuses at the end of the year, an 8 percent increase over last year. Goldman Sachs says that it plans to cut $1.2 billion in costs by laying off 1,000 people, roughly 3 percent of its workforce.
Leber also reports that Wall Street executives are preparing their staffs for smaller year-end bonuses, although the change is not yet reflected in the expenses. During the first six months of the year Citigroup, JPMorgan, Goldman, Morgan Stanley and Bank of America set aside $65.69 billion to cover compensation and benefits, according to data provided by Nomura. But financial firms tend to wait until the fourth quarter to make the call on the annual payouts.
Unless Goldman and other banks follow up a tough season by handing out smaller bonuses later this year, these cost-saving initiatives are only superficial. A group of shareholders challenged the Goldman board of directors for showing "scant regard" for their interests, having handed out billions in bonuses the same year it received federal aid. Goldman won a dismissal of the case yesterday.
Can you say "focused on the wrong thing"? Cutting down on the size of cups and plants to save money, but not reducing the amount of executive bonuses. This is what happens when you give out billions of dollars with no regulation or requirements for how it should be used. Lay off thousands of workers and get smaller cups, but increase executive bonuses. Makes sense to us. Not! Greed wins again.
Read more at Think Progress.
In other news: California Prisoners Resume Hunger Strike.