Goldman Sachs has been hit by a wave of defections, and the atmosphere at the financial giant is at “an all-time toxic high right now,” The Post has learned.
Six overworked first-year bankers quit and walked out en masse from the bank’s 200 West Street headquarters Wednesday after getting news of their bonuses, sources told The Post.
Their departures have been followed by others in the same division — as everyone from chief executive David Solomon on down — constantly stresses 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 Post. “We’re being threatened to perform or be cut.”
The six first-year bankers and one second-year banker were members of the healthcare desk and left after being run-into the ground and “treated terribly” by higher-ups, sources told The Post.
First years learned that the bonuses of the class above them — who had disclosed to Goldman they would leave after completing their second year — were substantially lower than expected, according to sources
People with knowledge say the second-year bonuses — communicated to bankers in July and awarded in August — precipitated the mass exit of bankers who didn’t think it was worth it to stay another year.
The final insult was the low compensation — given the thousands of hours of grunt work –while associates, who are just a few years older, received as much as three to four times their pay, a source said.
All the workers who quit have lined up jobs took jobs in tech, private equity or healthcare, the sources said.
Goldman’s healthcare banking group is seen as the best on the street, so the disappointing bonuses in this sector alarmed other juniors internally, sources said.
A person familiar with the bank’s thinking downplayed the defections.
“There’s always natural turnover around bonus season, and this small number of departures is par for the course,” the person said.
“Goldman is seeing a record amount of applications for roles like these,” this person added.
While junior bankers will often hand in their resignation after getting a bonus and nabbing a new job at another company, the coordinated effort is unusual — and underscores the resentment and animosity many analysts feel toward the bank, insiders said.
These Insiders predict the mass exodus is expected to continue as Goldmanites reach a breaking point.
“I bet TMT is next,” a source said — referring to the technology, media, and telecom banking group, which is seen as one of the most coveted sectors in the bank.
Goldman Sachs has said it is slowing hiring and bringing back performance reviews to cull the bank’s lowest performers after profits were nearly halved in the most recent quarter.
As the pandemic-era boom in corporate dealmaking begins to sputter amid rising recession fears and surging interest rates, the bank is looking to cut costs companywide.
“Given the challenging operating environment, we are closely re-examining all of our forward spending and investment plans,” Chief Financial Officer Denis Coleman said on the company’s earnings call last month. “Specifically, we have made the decision to slow hiring velocity and reduce certain professional fees going forward.”
The bank will weed out laggard staff by simply not filling roles after employees leave and by axing its lowest performers, Coleman said. The dreaded performance review had been suspended during the pandemic when the bank was looking to hire as many people as possible as profits hit all-time highs.
But a source adds it’s not just top management telling investors jobs will be cut — “we’re being told directly from group heads” we could be fired as well, the source adds.
While bonuses on Wall Street hit record highs last year as financial giants like Goldman Sachs and JPMorgan grappled with a dire lack of bankers amid a surge in dealmaking, compensation has trailed off this year.
The stingy payouts come as Wall Street faces a sharp dropoff in the flow of big corporate deals including IPOs and leveraged financing, sparking renewed fears that layoffs are looming in the months ahead.
Source: NY Post
