Goldman Sachs fires mid-level bankers after dishing out bonuses and hiking salaries during pandemic
Goldman Sachs has launched a wave of mass layoffs of workers across the US after dishing out cushy bonuses and high salaries during pandemic – amid an anticipated drop in earnings as the economy slows.
The investment-banking division of the Wall Street giant launched the effort last week, according to a report, firing hundreds of bankers in offices across the globe, as it looks to rein in expenses and weed out low-performing employees.
Employees at all levels were affected by the cull, sources said – with the brunt of the effort being felt by senior-to-mid-level staffers, such as several senior associates and vice presidents.
Nearly a dozen bankers in the prestigious bank’s technology, media and telecommunications division were fired alone.
Consumer retail, health care and industrials divisions were all reportedly hit by layoffs, which had been anticipated after the firm said back in July that it planned to slow hiring and reinstate annual performance reviews, Bloomberg reported.
That announcement came as the bank recorded a marked 40 percent drop in earnings this year alone after seeing a brief business boom during the pandemic.
This spurred Goldman brass to at the time pause its-then routine layoff process, and dish out an array of fancy perks in an effort to retain staff amid increased demand for workers across the industry.
Goldman Sachs has launched a wave of mass layoffs of workers across the US after dishing out cushy bonuses and high salaries during pandemic – amid an anticipated drop in earnings as the economy slows. Pictured are staffers outside Goldman’s headquarters in Lower Manhattan
Prior to the pandemic, Goldman annually nixed roughly 1 to 5 percent of staffers from its workforce every year. This round of layoffs are on the lower end of that range, insiders have said – but it still represents a drastic turn from the company’s attitude less than a year ago
Prior to the pandemic, Goldman annually nixed roughly 1 to 5 percent of staffers from its workforce every year. This round of layoffs are on the lower end of that range, insiders have said – but it still represents a drastic turn from the company’s attitude less than a year ago, when it was hiking salaries and dishing out perks.
It’s been ‘a tough week,’ one source with knowledge of the investment firm’s inner workings told Insider of the supposed sackings, which were reported by the outlet on Friday.
An insider also shared how earlier in the day staffers at the firm’s technology, media, and telecommunications department at both its New York and San Francisco officers were met with pink slips by the end of the day.
Other divisions that felt the impact of the cuts, sources said, included consumer retail, healthcare, and industrials.
All talent was affected by the cull, one insider said, revealing that workers from all levels found themselves out of a job – from its most junior bankers to its managing directors.
It was not immediately clear from initial reports how many staffers were fired exactly – but it appears that the number is in the hundreds.
An insider shared how brass for the big bank were carefully calculating the layoffs, and not nixing too many senior or junior employees.
‘It’s a balancing act. You can’t cut too many of the senior bankers because even though they are costly, they are the one who bring in more business,’ the source explained. ‘And junior bankers, yes they’re cheaper, but if the overall business is slow, they don’t have much work to do.’
The firm had 47,000 employees at the end of the second quarter and a one percent cut to staffing would be a reduction of about 500 bankers.
The firm has roughly 47,000 employees – and a one percent cut to staffing would be a reduction of about 500 bankers
The firings had already been anticipated after the firm said back in July that it planned to slow hiring and reinstate annual performance reviews
Before the pandemic, Goldman annually culled 1 to 5 percent of its under-performers, with sources since indicating that this round is within that range, on the lower side.
With that said, bankers at the firm’s numerous offices overseas were similarly not spared – with around a dozen bankers in the London office of Goldman Sachs also axed, a source told the Financial News.
At the company’s burgeoning China branch – which just last year enlisted 400 workers to roughly double its workforce – more than two dozen bankers had been fired as a result of the recent cull, Reuters reported.
According to one source, employees cut from the firms TMT team were invited into calls with national-level group leaders including
Other partners may have also been involved in the exit conversations, this person added.
As news of the firings spread over the weekend, reps for the Wall Street stalwart seemed to assert in statements to several outlets that the supposed firings, if they in fact occurred, would demonstrate a return to business as usual at the big bank.
‘Every year globally we conduct a strategic assessment of our resources and calibrate headcount to the current operating environment,’ a spokesperson told The New York Post. ‘We continue to remain flexible while executing against our strategic growth priorities.’
DailyMail.com reached out to the public relations department at Goldman Sachs upon the publishing of this article for more details on the reported firings Monday evening.
The resumption layoffs come in response to a dramatic slump in revenue reported by the big bank and its chief executive David Solomon, who recorded second-quarter earnings of $2.93 billion in June
The resumption layoffs come in response to a dramatic slump in revenue reported by the big bank and its chief executive David Solomon, who recorded second-quarter earnings of $2.93 billion in June.
The number came as a shock to some, including executives who had enjoyed a boon during the pandemic, as it was precipitously lower than the yield recorded in the second quarter of 2021, when the bank hauled in $5.49 billion.
Amid the dramatic decrease, brass at the big bank took a variety of measures to save their bottom line – measures that some workers panned as miserly.
In April, the bank ruffled feathers when it ceased offering employees free rides to and from the office, and also did away with free breakfasts and lunches.
‘Of course they took the coffee away,’ a source told The New York Post at the time, ‘But I’ve been so slammed since Labor Day I haven’t really had time to think too much about it.’
The worker added there was still free drip-coffee in an 11th floor lobby, but that it was less quality than the old, full-service coffee station and more difficult to access.
They also noted Goldman seemingly tried to sweeten the raw deal by giving bankers complimentary cupcakes on their first day back after Labor Day.
In April, Goldman Sachs ceased offering employees free rides to and from the office, and also did away with free breakfasts and lunches
In May, the company again seemingly attempted to offer staffers a sweetener when it offered senior employees unlimited time off – a policy some critics at the time panned as a hidden agenda to goad under-pressure staffers still work long hours, while brass attempt to raise bottom lines.
In August, Goldman notified its staff that it would nix pandemic protocols such as the allowance of remote work, with employees expected to be in the office five days a week.
The announcement was the culmination of several months of the stripping away of accommodations offered to employees to incentivize them to come into the office when they weren’t required to be there.
Goldman is not the only bank wrestling with what to do with their employees and offices.
At JP Morgan, CEO Jamie Dimon reportedly told senior staff that he expected junior workers to be at their desks five days a week, despite official policy that only expects them there three days a week.
But over at Citigroup, CEO Jane Fraser has maintained a ban on Zoom calls on Fridays, and still only asks employees to come into the office a few days a week without requiring them to be there for a full five days.
Bank of America CEO Brian Moynihan has said the bank would be announcing office plans in the coming weeks.