Goldman Sachs has revealed a series of dramatic cost cuts and a 58 per cent drop in fourth-quarter earnings, after grappling with tumultuous trading conditions in the latter part of the year.

Like many of its investment banking competitors, Goldman was hit by eurozone turmoil and a subsequent slowdown in -market activity in the last three months of 2011. The results -follow disappointing earnings at rivals JPMorgan and Citigroup after customers withdrew from trading.

Goldman responded to market conditions and client retrenchment – cutting operating expenses 14 per cent in the year to $22.64bn. That includes a striking 2,400 job losses and a 21 per cent reduction in employee pay – including bonuses paid to its bankers. “This past year was dominated by global macroeconomic concerns, which significantly affected our clients’ risk tolerance and willingness to transact,” Lloyd Blankfein, chairman and chief executive, said in a statement.