(Bloomberg) Goldman Sachs Group Inc. cut jobs and money to pay employees and will seek $500 million in additional cost reductions this year after first-half revenue fell to the lowest since 2005.

Compensation, which includes salaries, benefits, bonuses and the expense of deferred pay awarded in prior years, dropped 14 percent to $7.29 billion in the first six months, the New York-based bank said today in a statement. Revenue in the same period dropped 14 percent to $16.6 billion.

Lloyd C. Blankfein, 57, has cut 1,000 jobs this year to counter the slowest first-half since before he became chairman and chief executive officer in mid-2006. Trading, which contributed about 60 percent of the bank's revenue in 2011, dropped 6 percent in the first half from a year earlier. Blankfein said last month he thinks the slowdown is a temporary reaction to the financial crisis.

"We're very cognizant of the returns our shareholders get versus what our employees get," Chief Financial Officer David Viniar said on a conference call with analysts. Compensation will probably be the primary target for additional cost reductions, he said. The bank will add junior employees and will try to strike a balance to avoid losing talent, he said.

"If we cut our comp very dramatically in one year, it would help our returns, but we live in a competitive environment," he said. "We still have people leaving for multiyear offers" from rival banks and other financial firms.

Average Employee Pay

The first-half compensation expense, at 44 percent of revenue, is enough to pay each of Goldman Sachs's 32,300 employees $225,789 for the first six months of the year. The firm set aside $8.44 billion a year earlier, which was 44 percent of revenue and equal to an average $237,662 for each of the 35,500 people employed by Goldman Sachs at the time.

The last time Goldman Sachs generated less revenue in the first half was 2005, when the company made $11.2 billion, according to company reports. The firm, which reported it had about 21,800 full-time employees at the end of the fiscal first half in 2005, began including consultants and temporary staff in its employment numbers in 2009. The firm is the fifth- biggest U.S. bank by assets.

JPMorgan Chase & Co., the largest U.S. lender, cut first- half compensation expenses at its investment bank 16 percent to $4.91 billion, or 35 percent of revenue. That would be enough to pay each of the 26,553 workers in the unit an average of $184,989 for the period.

In the first half of 2011, JPMorgan allocated $5.86 billion for compensation in the unit, or 38 percent of revenue. That was enough to pay an average $211,358 for each of the 27,716 employees at the time.

Figures for average pay don't represent what any employee actually receives and are calculated by dividing the total compensation expense by the number of employees.