Citigroup Inc. and Goldman Sachs Group Inc., facing a weakening economy and the prospect of mounting losses, began laying off workers this week as part of their efforts to cut more than 12,000 jobs, people with knowledge of the matter said.

Goldman, which converted last month from the biggest U.S securities firm into a commercial bank, began telling about 3,200 employees, or 10% of its work force, they were out of a job Wednesday, according to one of the people, who asked not to be identified, because the decisions were confidential.

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