By Paul R. La Monica, CNN Business
Goldman Sachs announced a major reorganization Tuesday as the Wall Street powerhouse grapples with market volatility.
Goldman Sachs (GS) announced Tuesday morning that it is combining its trading and investment banking divisions into one unit. That will streamline its operations, cutting the number of main operating lines at Goldman Sachs (GS) from four to three.
The company is also folding its digital-focused consumer banking product Marcus into its wealth management business.
“Today, we enter the next phase of our growth, introducing a realignment of our businesses that will enable us to further capitalize on the predominant operating model of One Goldman Sachs as we better serve our clients,” said Goldman Sachs CEO David Solomon in a statement. “In January 2020, we outlined our strategy in clear and direct terms, introducing a plan to grow and strengthen our core businesses, diversify our products and services, and operate more efficiently as we drive higher, more durable returns,” the statement also reads.
Reorg announced during earnings call
The announcement, which was previously reported on by several financial news outlets Monday, was officially announced Tuesday morning along with Goldman Sachs’ latest quarterly earnings during a conference call hosted by the company, along with the firm’s third quarter investor report.
Goldman Sachs reported revenue of nearly $12 billion for the quarter and earnings of $3.1 billion.
Results topped forecasts, but revenue fell 12% from a year ago as the company was hit by the slowdown in the global financial markets. Deal volume dried up, with fewer companies going public and announcing big mergers. Investment banking revenue plunged 57% from a year ago.
Still, shares of Goldman Sachs surged nearly 3% on the news. The company fared better than rival Morgan Stanley (MS), which disappointed investors when it reported its latest results Friday.
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