Goldman Sachs has been hit by a wave of defections, and the atmosphere in the financial giant is “all-time high right now,” The Washington Post has learned.
Six overworked bankers in the first year have quit and en masse from the bank’s 200 West Street headquarters on Wednesday after receiving news of their bonuses, sources told The Post.
Their departure was followed by others in the same department – like everyone from CEO David Solomon onwards – constantly emphasizing the need to “perform, perform, perform,” sources told The Post.
“People are on a whole new level of edge… given the economic climate,” a source told the newspaper. We are in danger performance or cut. ”
The six first-year bankers and one second-year banker were members of the health care office and left after hitting the ground and being “treated terribly” by senior officials, sources told The Post.
The early years knew that the bonuses for the top tier – who disclosed to Goldman that they would leave after completing their second year – were much lower than expected, according to the sources.
People in the know say second-year bonuses – sent to bankers in July and awarded in August – precipitated a mass exodus of bankers who didn’t think it was worth staying another year.
A source said the latest insult was the low compensation – given the thousands of hours of hard work – while the employees, who are only a few years their senior, received up to three to four times their salaries.
All of the workers who quit in rows worked in jobs in technology, private equity or healthcare, the sources said.
Goldman’s healthcare banking group is seen as the best on the street, so disappointing rewards in the sector have other young people internally worried, sources said.
Someone familiar with the bank’s thinking downplayed the defections.
“There is always a natural cycle around bonus season,” the person said, “and that small number of departures equals the course.”
“Goldman is seeing a record number of applications for roles like this,” the person added.
While junior bankers often hand in their resignations after receiving a bonus and a new job placement at another company, the coordinated effort is unusual — and underscores the resentment and hostility many analysts feel toward the bank, insiders said.
These insiders predict that the exodus will continue as the Goldmanites reach their breaking point.
“I bet TMT is next,” a source said – referring to the technology, media and telecoms banking group, which is seen as one of the bank’s most coveted sectors.
Goldman Sachs says it’s slowing hiring And reassessments of performance to rule out the bank’s underperformance after earnings nearly halved in the last quarter.
With the prosperity of the epidemic era in Dealing with companies begins to fade Amid growing fears of an economic recession and rising interest rates, the bank is looking to cut costs company-wide.
“Given the challenging operating environment, we are closely re-examining all of our forward spending and investment plans,” Chief Financial Officer Dennis Coleman said on the company’s earnings call last month. “Specifically, we have made the decision to slow down the pace of recruitment and reduce fees for certain careers in the future.”
Coleman said the bank will weed out laggards by not filling roles after employees leave and weeding out low-performing employees. The dreaded performance review was put on hold during the pandemic when the bank was looking to hire as many people as possible as profits hit an all-time high.
But the source adds that it’s not just senior management telling investors that their jobs will be cut – “we are told directly by the group heads,” the source adds.
While bonuses on Wall Street hit record levels last year as financial giants such as Goldman Sachs and JP Morgan grappled with a severe shortage of bankers amid a surge in dealmaking, compensation has fallen this year.
The slight payments come as Wall Street faces a sharp drop in the flow of major corporate deals including initial public offerings and leveraged financing, sparking renewed fears that Layoffs looming in the coming months.