The cutbacks that normally happen when Goldman Sachs carries out its biennial choice of new partners is likely to be more severe than usual this year because of a lower-than-expected turnover of top employees, which will force the troubled US firm to oust dozens of existing partners, the Financial Times said.

At present, Goldman Sachs has 400 existing partners and more than 33,000 employees. The firm operates a large wealth management business.

The cutbacks will also happen at a time when Goldman Sachs has been trying to defend itself against US regulatory allegations that it dishonestly played both sides of the market in selling a collateralised debt obligation product to investors. The alleged offence – which the firm vigorously denies – has raised questions over how such a firm can handle such potential conflicts of interest.

The choice of partners is closely watched both inside and outside Goldman because those joining the highest rank in the bank’s hierarchy command high pay packages and significant influence within the bank, the FT report said.

This year the market will be watching to see whether Lloyd Blankfein, chief executive and a former trader, promotes more investment bankers in an effort to shift Goldman away from the trading businesses that caused its recent troubles, the report said.

Figures in the US wealth management industry have told this publication that they expect some clients of Goldman’s wealth arm to defect over concerns about the CDO scandal.

Goldman Sachs is accused by the SEC of selling securities to investors without letting them know it had simultaneously involved renowned hedge fund investor John Paulson in choosing some of these securities to short sell. Paulson has made vast profits by accurately foreseeing the meltdown in the US sub-prime mortgage market.