By: Serach Nissim
A group of Goldman Sachs bankers quit en masse, amid a reportedly poor work environment.
As per a recent article in the NY Post, on Wednesday, a half a dozen overworked Goldman Sachs employees walked out of the bank’s 200 West Street headquarters, after receiving news regarding their bonuses. The six first-year bankers and one second-year banker were part of the bank’s healthcare desk, and they were followed by more departures in the same division. Employees are under constant pressure to “perform, perform, perform,” sources told The Post. “People are on a whole new level of edge … given the economic climate,” one source said. “We’re being threatened to perform or be cut.”
The financial giant’s healthcare banking group has a reputation for being the best on Wall street, so when the bankers got news of disappointing bonuses they bolted, thinking it wouldn’t be worthwhile to stay another year. As this sector has such a strong rep, other juniors working in different departments panicked anticipating their own bonus disappointments and followed suit, sources said. The insiders predicted the resignations would continue in other sectors of the bank.
A source familiar with the bank downplayed the defections. “There’s always natural turnover around bonus season, and this small number of departures is par for the course,” the source said. “Goldman is seeing a record amount of applications for roles like these”. Junior bankers do regularly resign after getting their bonus, and opt for new jobs. The lackluster payoffs are a function of the steep declines in big corporate deals, IPOS, and leveraged financing deals on Wall Street.
Last year, bonuses in the financial industry reached record highs as banks including Goldman Sachs and JPMorgan needed as many bankers as they could get, amid a surge in dealmaking. This year, however, compensation has dropped off, amid fears of recession and a slowdown in deals. Banks have also warned that layoffs will be inevitable in the upcoming months, so letting junior bankers leave due to low bonuses, may not seem like the worst thing for Goldman.
In the most recent quarter, Goldman reported that profits were close to half what they were last year. The looming recession and rising interest rates are leading the bank to implement company-wide cost cuts. “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.”
It’s not just CEO David Solomon making an announcement about future layoffs in an internal meeting or to investors though, “We’re being told directly from group heads” that we could be fired, said a source for the Post. The atmosphere at Goldman is at “an all-time toxic high right now,” a source said. Junior bankers are being “treated terribly” by higher-ups, a source for the Post added.