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Inside Goldman Sachs' layoffs: 'Every 10 minutes, I just kept hearing that someone was being let go'
Carter Johnson and Hayley Cuccinello
Employees arrive to work at Goldman Sachs' global headquarters in New York City.
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Goldman Sachs enacted mass layoffs from NYC to Dallas between Tuesday and Wednesday.
Consumer banking teams were hit particularly hard, with hundreds let go in lending alone.
"Every 10 minutes, I just kept hearing that someone was being let go," one employee said.
Goldman Sachs kicked off its most brutal round of layoffs in at least a decade this week, sending dozens of axed employees flocking to social media to lament their loss and seek new employment.
The layoffs, which started Tuesday and continued into Wednesday, stand to put as many as 3,200 Goldman employees, or 6.5% of its total workforce, out of work. Jobs were culled from Dallas to New York City, as well as Salt Lake City and Chicago, according to LinkedIn posts and people familiar with the cuts. The layoffs hit a wide-range of business units, from investment banking to human resources to technology, as well as the bank's troubled consumer banking division, which was co-headed by Stephanie Cohen and Tucker York until this year.
The cuts come as Wall Street's core business of underwriting stocks and bonds and advising on mergers and acquisitions dries up, sending revenues plummeting. Goldman, which reports fourth-quarter earnings next week, has had the added problem of having lost billions on its nascent consumer banking experiment.
That division, which has not paid off as expected, was hit particularly hard by Wednesday's layoffs, staffers said.
Goldman insiders said hundreds of workers were laid off in consumer lending. Other consumer banking teams that saw cuts included marketing and deposits. "My team had 25 and 10 were let go, all under VP level," said one laid-off consumer banking associate.
"We've just been hearing that today was doomsday and that we'd start hearing cuts this morning. Every 10 minutes, I just kept hearing that someone was being let go," this person said.
Every 10 minutes, I just kept hearing that someone was being let go. Consumer banking associate
Goldman Sachs' spokesman Tony Fratto said: "We know this is a difficult time for people leaving the firm. We're grateful for all our people's contributions, and we're providing support to ease their transitions. Our focus now is to appropriately size the firm for the opportunities ahead of us in a challenging macroeconomic environment."
A woman departing Goldman's headquarters at 200 West Street in New York City on Wednesday morning said she had also been let go from Goldman's consumer bank, and wasn't surprised to have been caught up in the layoffs. But she took issue with not having received a bonus despite "a very hectic year."
"I've put in some crazy hours," said the woman, who declined to share her name. "This is a very hectic and high-demanding environment. It's almost like good riddance, maybe."
Reducing 'redundancies'
This is the second time Goldman has cut staff in recent months after staffing up during the pandemic to meet a boom in M&A, IPOs, and risky special purpose acquisition vehicles, or SPACs.
Michael Kovac/Getty Images
The first cuts, however, targeted solely low performers based on Goldman's annual review process, which it brought back this year following a pandemic-induced hiatus. The latest round of cuts was aimed at some low performers, but also at lowering the company's bloated expenses amid a restructuring plan put forth by CEO David Solomon in the third quarter, said a person familiar with the company's plans.
One Goldman vice president laid off on Wednesday said she was "a bit shocked" at finding herself among those let go. "I had a great annual review so wasn't expecting it," she told Insider.
The axed VP said she learned of the news after getting an email from her managing director saying they "needed to talk." Over Zoom, the MD "gave a scripted thing about workforce reduction; cost savings, removing redundancy due to merging of departments."
She said the bank was offering axed workers a minimum of 60 days severance pay with additional pay based on the number of years worked. Other laid-off workers also reported getting severance offers of between two to three months on Wednesday.
Solomon is under pressure to cut costs ahead of the bank's second-ever investor day, scheduled for the end of February. Goldman's headcount has skyrocketed in recent years, jumping to 49,100 people as of the end of September, up 34% from 2018 when Solomon took over as CEO.
In addition to laying off staff, the bank is undergoing its biggest cost-cutting exercise since the financial crisis, including a review of its private jets, according to the Financial Times.
Bonuses, which are on track to be communicated to staff next week, are also slated to be down across the board, including potentially for some high-performing teams. As Insider has previously reported, lower bonuses combined with layoffs has left a sour mood inside the bank — and has some insiders bracing for defections.
Said the laid-off VP: "There was high anxiety and lack of work for getting done" since word of the layoffs emerged last month. "Morale was down. It should have just been done. More quietly. And not a week before bonuses."
The laid-off consumer banking associate also complained about how layoffs were communicated, saying it's been a drip of bad news for months, ever since Goldman announced plans to restructure the bank in October — a move that dramatically whittled its consumer banking ambitions.
"For almost over a month we've known something was coming, but Goldman was not giving us any info," this person said. "Communication throughout has been very lacking, and technically they never said once that something like this was going to happen" until Solomon broke the news of job cuts in his annual year-end message to staff late last month.
"We've all been on the edge of our seats," she said. "That's the stereotype of Goldman Sachs, but it's really true. People are working more than they ever have at other jobs. It's all about the money."
Emmalyse Brownstein and Reed Alexander contributed to this report.
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Goldman Sachs Layoffs