Goldman Sachs Inc. (GS) executives are discussing making cuts to its commodities trading desk, once one of the investment bank's largest sources of revenue, according to a Wall Street Journal report Tuesday.
Goldman will execute the cuts after a months-long review process that revealed the division burned through too much capital for too little profit. The cuts to the commodities desk are part of a series of planned changes that executives will present to Goldman Sachs' board later this month.
The review comes in the wake of the ascension of new CEO David Solomon to the top of the bank's hierarchy. Solomon reportedly has been re-examining each of the bank's businesses in an effort to find areas where cuts can be made.
Goldman traders had their worst year on record in 2017. While there was a slight rebound last year, few people believe that the commodities desk can regain the profitability it had a decade ago when it contributed as much as 15% of Goldman's pretax profits, according to the Journal.