This week, Goldman Sachs laid off more than 3,000 people, but some insiders allege the bank has a plan to increase that number to 4,000 in the near future.
In December, it was reported that Goldman planned to lay off as many as 4,000 employees this month. On Wednesday, when the bloodbath reached its climax, sources reported that no more than 3,200 people were given pink slips.
According to insiders, however, if Goldman distributes yearly bonuses the next week, this disparity of 800 employees may quickly shrink. This is because the payouts are anticipated to be so meager that recipients will leave in disgust.
“People are expected to resign the following week,” a person close to the bank stated.
Thousands of Goldman employees are likely to learn the magnitude of their yearly bonuses the next week, primarily on Tuesday and Wednesday, following the release of Goldman’s fourth-quarter results report. Many are preparing to be stiffed in the wake of “David’s Demolition Day” — the name staff gave to Wednesday, when CEO David Solomon unleashed the massacre.
“The most effective strategy to urge employees to contemplate quitting is to reduce the size of their bonus… They will not do nothing, but they may do considerably less to persuade someone to leave.” The CEO of the staffing agency Breault & Smith, John Breault, told The Post.
The majority of a Wall Street banker’s annual salary often consists of bonuses, which are projected to suffer a big knock this year. According to statistics from compensation consulting firm Johnson Associates, investment bankers’ bonuses would likely be lowered by as much as a third as banks prepare for revenue declines of up to 50 percent by 2023.
Partners may experience the most suffering: According to a rumor, Solomon will reduce the bonus pool for the roughly 400 partners by up to half. Bloomberg reported that incentive pools for traders will be reduced despite the global markets division generating $25 billion in 2022, a 15% rise from 2021.
Goldman’s efforts to encourage people to leave are not novel. In reality, it is the revival of a concept that media magnate Barry Diller first coined: “firing by process.”
Diller believes that it is considerably simpler and less expensive to induce an employee to leave than to fire them. Companies do not have to pay severance or risk litigation in the event of a voluntary resignation.
However, not everyone should be frightened. Even in a difficult economic climate, according to recruiters, banks will find a way to compensate rainmakers and top achievers.
Still, banks will find a way to pay someone… “They make sure they take care of the top five percent of employees,” Breault explains.