Goldman Sachs just made a big change, and it highlights just how tough it is out there

Goldman Sachs just named Jim Esposito, who had been cohead of the bank's global-financing group, as chief strategy officer in the securities division on Wednesday.

The memo announcing the move, obtained by Business Insider and confirmed by a spokesman, highlights some of the challenges the bank faces in sales and trading.

The securities business is primarily made up of equity sales and trading, which has been doing great across Wall Street, and fixed income, which has had a terrible time lately.

Fixed income, currency, and commodities, or FICC, revenues at Goldman Sachs missed analyst expectations in the fourth quarter, coming in at $1.12 billion with $1.19 billion expected.

They were down 8% from the year-ago quarter, which the firm attributed to "significantly lower net revenues in commodities" and lower mortgages and currencies revenues.

The memo circulated on Wednesday to announce Esposito's appointment hints at a potential change in strategy (emphasis added):

We have a uniquely balanced and formidable presence in all products and regions across the division. At the same time, our industry is undergoing extraordinary change, driven by technology and regulation. These forces are reshaping market structure and pressuring many of our competitors to retrench or exit from businesses and regions. These developments are particularly profound in FICC, where the industry is experiencing both cyclical and secular pressures. As a result, we see significant opportunity to work more deeply and expansively with an even larger set of clients.

As a long tenured leader in the Investment Banking Division (IBD) and as global co-head of the Global Financing Group, Jim has a deep understanding of our corporate clients and a successful track record in identifying effective capital market solutions to address client needs. The ability to deliver the full range of products and services we offer to our clients is more valuable today than any other time that we can recall. Our mission is to adjust our practices and aspirations in a way that takes into account structural developments and our strong market position. Of course, we continue to focus intently on running all of our businesses efficiently and in a disciplined manner. We do so recognizing the reality of constrained resources in FICC.

It isn't just Goldman Sachs that has been suffering in fixed income, of course, and banks across Wall Street have been coming up with different strategies to adjust. Morgan Stanley responded to the headwinds by cutting 25% of its headcount in that division.

Goldman had generally indicated that it would stay the course in its FICC business and continue to maintain a presence while its rivals pull back.

CFO Harvey Schwartz presented a pretty bullish case for fixed income in a call following the release of Goldman Sachs' fourth-quarter earnings last month.

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