Goldman Sachs CEO David Solomon isn't going to fire you in the coming weeks, but he might persuade him to show you the door.
Insiders at the Wall Street giant say the bank will lay off 3,200 employees in early 2024 after a traumatic year that began with “David Demolition Day,” a cold morning last January. Employees say they are nervous.
But with pay announcements scheduled for next week this month, people close to the company say late starters are likely to receive year-end benefits that are larger than their pink slips.
This is despite the fact that last year, the bank fired underperforming employees the week before announcing compensation, a practice that allows the bank to avoid giving bonuses to departing employees.
Goldman loyalists were encouraged by Mr. Solomon's holiday audio message to employees last week, which was much more upbeat than the year before, when he warned that mass layoffs were coming soon.
One source described this year's message as “a scripted rosy one.''
“It was a gentle message. Thank you for your hard work and have a nice holiday,” the source said.
“As we approach the end of the year, I would like to express my deep gratitude for your dedication and contributions to our culture, our clients, and the broader company,” Solomon said in an audio message obtained by On the Money. I thought so,” he said.
“We make no predictions. The environment is always subject to change again, but we have reason to believe that 2024 will be an exciting and productive year for Goldman Sachs, and the strength of our client franchise will allow us to move forward in an attractive manner.” We can continue to differentiate ourselves.”
Nevertheless, sources familiar with management's thinking say CEO Solomon and his team are betting that late starters will receive disappointing bonuses and leave.
Senior executives are also optimistic that the market will get back on track and trading will resume, and say Goldman will need a large number of bankers to do the job.
In fact, some at the company worry that banks will make more exits than they would like.
A Goldman spokesperson said in a statement: “Our compensation philosophy remains unchanged and we remain focused on investing in our people, especially our top performers.” We do not intend to comment on speculation regarding compensation cycles. ”
Solomon also emphasized the importance of paying good people.
Mr. Solomon told the FT's Global Banking Summit that Goldman “pays based on performance.”
Officials say there is no fat left to cut given multiple rounds of layoffs in 2023, and the bigger concern is retaining top performers even after a dismal bonus round. It is pointed out that there is.
Regarding retention at the company, a person involved says that too often, “bad people end up staying, and good people quit.''
