NEW YORK -- The latest victim of Wall Street's cost-cutting woes: Free lunches for traders at Goldman, Sachs & Co.
As of tomorrow, traders at the nation's largest and richest private partnership will be forced to foot the bill for their daily deliveries of sandwiches and the like, people within the firm said.
The move comes after the 126-year-old firm suffered one of its worst years ever, prompting a $650 million cost-cutting campaign that included firing almost 15 percent of a work force that totaled about 9,200 people at mid-year.
In a memo, the firm said it was cutting the lunch program to keep costs in line with other Wall Street firms, most of whom have cut back on free traders' lunches.
In the past, many securities firms bought lunch for traders in an attempt to keep them at their desks throughout the work day. The meals typically included sandwiches, a salad and a desert. At Goldman, traders are able to order from the company's own kitchen or from outside vendors.
As Wall Street firms saw their profits plunge an estimated 80 percent last year, many firms have looked for new ways to cut costs. Goldman's profits fell 81 percent last year to $508 million from $2.7 billion in 1993.
Free traders' lunches have become an easy target for slimming expenses, and both Lehman Brothers Inc. and Merrill Lynch & Co. halted the practice last year. J. P. Morgan & Co. is one of the last large Wall Street institutions that continues the practice, providing free lunches to most of its staff.
Lehman, in an internal memo circulated in September, said it cut the program to be "consistent with its new philosophy of cost control."