Goldman Sachs intends to slash its London workforce in half and establish a pan-European bank in Frankfurt, Handelsblatt has learned.

Goldman Sachs may cut back its London branch.

Goldman Sachs has already begun implementing its post-Brexit plans, Handelsblatt has learned. This will include halving its workforce in London to 3,000 employees and re-organizing its operations in Frankfurt.

The move comes as British Prime Minister Theresa May made it clear Tuesday that she would push for a total withdrawal from the European Union: a "hard Brexit."

Goldman Sachs' London office currently employs 6,500 people, though that number has already begun to shrink as the bank relocates employees to Warsaw as part of its wider strategy to expand in Poland. Those who have moved were mostly workers who don't have daily contact with customers, those who work in processing or who handle technical aspects.

More relocations to Warsaw are expected, according to sources who spoke to Handelsblatt. At the same time, 1,000 Goldman Sachs jobs will likely be moved to Frankfurt. These will primarily include traders and top managers in charge of the bank’s legal departments as well as its regulation and compliance experts.

“Employees involved in trade and who are responsible for product development and have no contact with customers will likely be moved from London to New York,” one person who was familiar with the plans told Handelsblatt.

On the other hand, investment bankers who currently advise Spanish or French companies as they go public or prepare for a merger will be resettled to the countries in which their customers reside. “Certain functions will be more centralized in the U.S., while in Europe we will get more decentralized,” the source said.

The establishment of a Europe-based office should help unify operations in the different European countries. The pan-European bank will likely be based in Frankfurt, to be closer to European banking supervisors working under the purview of the Single Supervisory Mechanism, which since 2014 has fallen under the jurisdiction of the European Central Bank.

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By last year, Goldman Sachs had already secured itself the option of acquiring additional office space in the Frankfurt Trade Fair Tower and had held talks with the ECB.

The bank made no official comment on its post-Brexit plans. But it is clear Goldman Sachs and other banks have some important decisions to make.

If Great Britain follows through on its plans to disengage from the European single market, financial institutions in the country stand to lose their passporting rights.

Those rights allow investment banks to provide a variety of services to customers on the other side of the English Channel - from assisting firms with IPOs to helping investors liquidate their stocks - all without leaving London.

Passporting rights have also been one of the main incentives for foreign banks to settle on the banks of the Thames - making London into the European financial capital that it is today.

In order for investment banks to continue serving their customers in continental Europe after Britain's divorce from the European Union, they'll have to build - or build up - a presence in one of the 27 remaining E.U. member-states.

If Britain does fully exit the single market around 75,000 jobs in the British capital could be lost and the government may have to forgo up to 10 billion pounds in tax revenue, according to estimates from the consulting firm Oliver Wyman.

The five largest U.S. banks employ some 40,000 people in London - more than in every other European country combined.

Other American financial institutions with overseas headquarters in London say they have not yet reached a decision about moving their European operations.

"Banks are focusing more now on the worst-case scenario than they were last year, which foresees radical cuts in the U.K.," a London-based consultant told Handelsblatt.

In addition to Frankfurt, other European capitals like Paris, Luxembourg, Amsterdam and Dublin are also vying to attract British bankers and asset managers. The banking heavyweight HSBC has already set its sights on the French capital. After Brexit, some 20 percent of trade turnover and 1,000 jobs will be shifted to Paris, HSBC CEO Stuart Gulliver told journalists in Davos. That move, however, probably won’t happen before Brexit comes into effect in two years, Mr. Gulliver said.

Initially, the British banking sector was hoping the government would retain full access to the European single market and save the passporting rights. But as Ms. May made it clear that she had other plans in mind, the banks began to scale back their demands. Now, they are pushing for the so-called equivalence principle. Simply put, this would make it possible for financial institutions from non-E.U. countries to get access to the European Union as long as banking regulations in their home countries are accepted as equivalent by Brussels.

"The E.U.’s permission is needed and this permission can be revoked at any time," said Jochen Kindermann, a partner at the international law firm Simmons & Simmons.

For many banks, there are far too many questions outstanding about Brexit. The transitional solution Ms. May suggested would allow more time for the financial industry to adapt to Brexit-related changes, actually creates yet more uncertainty.

"There are simply too many ambiguities and risks," one London-based banker said. "Therefore, we must move quickly and implement our Brexit plans. "

Katharina Slodczyk is Handelsblatt's London correspondent. To contact the author: [email protected]