• 19 Jul 2011 at 12:23 PM

Layoffs Watch ’11: Goldman Sachs

After disappointing earnings with FICC revenues down 63% from last quarter, David Viniar announced on this morning’s call that GS expects to complete $1.2 billion in run-rate compensation and non-comp expense reductions by year end. Translation: 1,000 of you are out.


If you can find David Viniar $1.2 billion of savings, he’ll call it off

Yes, 1,000 people is the current guess, but DV says that “he reason I mentioned the dollars first is because we’re much more focused on the dollars, the savings we’ll create, than the number of heads.” Which means if you can save him the $1.2 billion then he won’t need to fire you. We’ve seen a start on cost savings from other banks but cutting back on late-night cars isn’t going to be enough here, so we need to hear some pretty radical ideas.

Goldman isn’t going to cave to Meredith Whitney and start firing people every month just to keep them on their toes

While employees of Goldman and Shake Shack are probably unhappy to hear that there are so many layoffs coming, Whitney is livid that there are so few. She asked “why the target of $1.2 billion is so low – is that the first swipe?” And she’s got ideas of her own about who’s not pulling their weight, telling Viniar right in front of everyone that Goldman Sachs Asset Management has “been fine, but it hasn’t been a shining star,” which was cold.

Viniar stood up for his people though. He nixed the “first swipe” idea, since layoffs are painful to do and they don’t want to have to do them again. And he defended GSAM, pointing out that it’s a business where Goldman isn’t in first place so there’s room to improve.

If you stay you still get paid

Viniar said that the $1.2 billion in savings will not come from lowering anyone’s compensation, but from headcount and related reductions. Looks like comp accrual per employee so far this year, backing out 1,000 unfortunates from the headcount, is about $244,000 through 2Q, down 11% from this time in 2010.

Goldman Sachs Reports Second Quarter Earnings Per Common Share of $1.85 [pdf]

33 comments (hidden to protect delicate sensibilities)
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Comments (33)

  1. Posted by GS-FI | July 19, 2011 at 4:44 PM

    FICC is going to be hardest hit across the board. I’m a recent MBA graduate (2 years out) and already hiring for FICC is down a lot. u00a0I don’t see GS hiring many, if any, graduates – both undergrad and MBAs – for FICC.nnQuestion is — if Goldman is hurting then where else should recent, bright graduates apply. u00a0What are the options open to current MBA students since finance hiring is down. u00a0nn

  2. Posted by Question | July 19, 2011 at 4:45 PM

    Hey Matt Levine,nnAre you not a recent Goldman alumni? u00a0We could do with some of your insight through your former colleagues who are still there about what the vibe / feel is. u00a0Which departments are feeling the most vulnerable?

  3. Posted by Junior | July 19, 2011 at 4:46 PM

    I like this post. u00a0Can someone answer what the hiring trends are in Golmdan for this year — internships and full-time. u00a0And more generally, what hiring is like at the Street.nn-Junior Ivy League / Aspiring I-banker

  4. Posted by Anonymous | July 19, 2011 at 4:52 PM

    What if I told you there were VP-level positions available for someone like yourself all over America? And what if I told you that you could work underneath the Oracle of Omaha himself?nn-DQ Assistant Manager

  5. Posted by Anonymous | July 19, 2011 at 4:54 PM

    GS-FI – nnI’m hearing UBS is looking.

  6. Posted by The Truth | July 19, 2011 at 4:57 PM

    u00a0The world needs ditch diggers too

  7. Posted by Anonymous | July 19, 2011 at 5:00 PM

    What if I told you that you could still work on Wall St, front office?nn- cashier manager, DR, 40 Wall

  8. Posted by Guest | July 19, 2011 at 5:05 PM

    UBS Fixed IncomennA place where you show up for the interview and think its some kind of fancy name for HR

  9. Posted by Overdone | July 19, 2011 at 5:06 PM

    What amazing, is the private sector has been hurting all theses months. Now a bank cut a couple hundred jobs and its new. A Job is a job, and when they are lost its hard no matter what.nhttp://www.dailyjobcuts.com

  10. Posted by guest | July 19, 2011 at 5:25 PM

    How many people would UBS have to fire to save $1.2 bln?

  11. Posted by Karl Mozurkewich | July 19, 2011 at 5:27 PM

    If Goldman is F’d take that as a signal: the industry is evolving again….nnInstead of going into i-banking start a business, innovate, do something productive. I hear Dunkin Doughnuts franchises are cheap…

  12. Posted by Guest | July 19, 2011 at 5:28 PM

    Not any more.nn-Caterpillar Mech. Engineer “quant”

  13. Posted by KeynesLives | July 19, 2011 at 5:30 PM

    The return of Keynsian economics nWonder what Paul key man would say.

  14. Posted by Anonymous | July 19, 2011 at 5:30 PM

    Hey Matt: so, you’re saying that your recent departure didn’t help with the comp reductions much, huh?

  15. Posted by MerchantRefugee | July 19, 2011 at 5:41 PM

    huh?u00a0 what aw you…a branch managa at Wes Fawgo?

  16. Posted by Guy with a sweet 1998 'lude | July 19, 2011 at 6:11 PM

    Why you gotta make fun of the stagecoach?nn

  17. Posted by Guy with a sweet 1998 'lude | July 19, 2011 at 6:11 PM

    Why you gotta make fun of the stagecoach?nn

  18. Posted by markstainmaker | July 19, 2011 at 6:38 PM

    meredith rules the world,u00a0 stand on me in stockinged feet,u00a0 ty.

  19. Posted by Anonymous | July 19, 2011 at 7:13 PM

    True, true.

  20. Posted by Former FICC Strat | July 19, 2011 at 7:34 PM

    It depends, do you speak Mandarin and can you read Chinese??nAre you a hot chick? That always helps.

  21. Posted by 25th Hour Trader | July 19, 2011 at 7:48 PM

    None. u00a0They don’t pay their employees. u00a0But I see what you did there with the trick question.

  22. Posted by early hominid | July 19, 2011 at 8:01 PM

    The headline says fear but the picture says air ukelele.u00a0

  23. Posted by early hominid | July 19, 2011 at 8:01 PM

    The headline says fear but the picture says air ukelele.u00a0

  24. Posted by Anonymous | July 19, 2011 at 8:21 PM

    No love at the Street. They announced another 850 cuts on top of the 1400 reductions announced in November. You could try the Trust or the Mellon though. nnhttp://www.bloomberg.com/news/2011-07-19/state-street-second-quarter-profit-rises-5-2-on-acquisitions-markets.html

  25. Posted by Anonymous | July 19, 2011 at 8:21 PM

    No love at the Street. They announced another 850 cuts on top of the 1400 reductions announced in November. You could try the Trust or the Mellon though. nnhttp://www.bloomberg.com/news/2011-07-19/state-street-second-quarter-profit-rises-5-2-on-acquisitions-markets.html

  26. Posted by Anonymous | July 19, 2011 at 8:36 PM

    The hands are doing the talking.u00a0 You try explaining some of those swaps deals without doing a little demonstrative “fisting”.u00a0 Go right ahead.

  27. Posted by Anonymous | July 19, 2011 at 8:36 PM

    The hands are doing the talking.u00a0 You try explaining some of those swaps deals without doing a little demonstrative “fisting”.u00a0 Go right ahead.

  28. Posted by Anonymous | July 19, 2011 at 9:22 PM

    When your released into the wild from Goldman are you n1) Tagged for tracking?n2) Still have to get your golden balls removed from God?

  29. Posted by Anonymous | July 19, 2011 at 9:22 PM

    When your released into the wild from Goldman are you n1) Tagged for tracking?n2) Still have to get your golden balls removed from God?

  30. Posted by tipster | July 20, 2011 at 1:19 AM

    ways that goldman has tried to increase revenue/decrease costs this year:n1. increasing the price of sodas in vending machines/cafeteria to $1.85/20 ozn2. increasing cereal costs 0.25 cts over the last yearn3. decreasing the size of coffee cups at the free coffee stations to 8 oz, from 12 ozn4. pushing dinner back to 8pm vs the street standard of 7pmnn-disgruntled under-caffeinated trading analyst

  31. Posted by reality | July 20, 2011 at 1:27 AM

    Seriously, dinner is no longer an option as far as the street standard is concerned. u00a0Suck it up and count yourself lucky to have a job.

  32. Posted by Elmers47 | July 20, 2011 at 1:39 AM

    WTF they still made a huge amount of money in ‘some towns’ so why lay off?nHow much is enough?

  33. Posted by Krugasaurus | July 20, 2011 at 5:06 PM

    He’d say “I’m so smart, sometimes I blow my own mind.”