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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]

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33 Responses to “Layoffs Watch ’11: Goldman Sachs”

  1. GS-FI says:

    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

    • Junior says:

      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

      • Anonymous says:

        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

      • Anonymous says:

        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

    • Anonymous says:

      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

      • Anonymous says:

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

        • Overdone says:

          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

    • The Truth says:

      u00a0The world needs ditch diggers too

    • 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…

    • Former FICC Strat says:

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

  2. Question says:

    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. Anonymous says:

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

  4. Guest says:

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

  5. guest says:

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

    • 25th Hour Trader says:

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

  6. Anonymous says:

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

  7. markstainmaker says:

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

  8. early hominid says:

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

    • Anonymous says:

      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.

    • Anonymous says:

      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.

  9. early hominid says:

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

  10. Anonymous says:

    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?

  11. Anonymous says:

    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?

  12. tipster says:

    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

    • reality says:

      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.

  13. Elmers47 says:

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

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