It’s shaping up to be a tough summer for the investment banking crowd as Wall Street reels from financial blows tied to bad mortgages and a credit market gone quickly — and historically — south; both Citigroup (C) and Goldman Sachs Group Inc. (GS) made headline Monday for layoffs either underway or yet in the offing, the latest in an industry bloodletting that doesn’t appear to be over just yet. Citigroup is allegedly set to cut 10 percent of its jobs at its i-banking unit, according to story filed Monday morning at the Wall Street Journal; at Housing Wire, we’ve heard rumors as well that the company last week slashed headcount in its mortgage operations, including account executives and managers. Officials at the bank had not denied or confirmed the mortgage-related layoffs by the time this story was published. The cuts at Citi would amount to roughly 6,500, the Journal reported, with Citi spokesman Dan Noonan playing coy and neither confirming nor denying the alleged staff cuts. More importantly, the Journal notes that Citi will eliminate entire trading desks in the process — our guess for endangered desks would have to involve collateralized debt obligations and private-party residential mortgage-backed securities. But Citi — wracked by the ongoing credit mess — isn’t the only firm trimming back amid the new, bleak reality on Wall Street. Even top performer Goldman Sachs is trimming 10 percent of its i-banking staff, according to a Monday report in the Financial Times, which noted that Goldman’s move may be more haunting for the industry as a whole. “Goldman’s heightened pessimism about its need to retain its more experienced staff during the rest of 2008 could prove a pretext for other banks to wield the axe with greater force,” said Chris Hughes and Saskia Scholtes in the FT story. Goldman earned $2.05 billion in the second quarter, beating analysts estimates, and making it one of the few Wall Street banks to turn a profit during the mortgage-led credit crisis that has seen rival banks absorb roughly $400 billion in write-downs tied to subprime mortgages alone. Disclosure: The author held no positions in GS and C when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.

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