"For the first time, it's clear that size and complexity come with a higher cost," the Goldman Sachs CEO said at a conference on Tuesday, according to The New York Times. Blankfein even emphasized that Goldman is trying to become a "low-cost provider," while cutting costs to improve its profit margins, according to The Wall Street Journal.
Goldman Sachs has cut its workforce by 3,100 employees, or roughly 9 percent, since the end of 2010, according to Reuters. It also is cutting pay to an average $314,000 per year, according to Fortune.
Some economists say that too-big-to-fail banks receive an implicit government subsidy, since they can take bigger risks with confidence that the government will likely bail them out. That can leave taxpayers on the hook for potential losses, not to mention the broader economic damage from a financial crisis instigated by Wall Street.
But being too big to fail can hurt banks too. Investors are valuing big banks at lower levels than their "book value," or net worth, in essence saying that the sum of each big bank is worth less than the parts.
Blankfein has been trying recently to rehabilitate Goldman's image, saying that parts of the Dodd-Frank Act may not be strong enough and that austerity hurts the economy. (He even volunteered on Saturday in a Hurricane Sandy relief effort.)