Complaints that Goldman Sachs job cuts weren't entirely objective
Goldman Sachs is cutting underperformers. Or is it? Some of those in teams that have been cut are complaining that the layoffs may not have been entirely motivated by performance.
In theory, Goldman's cuts are all about eliminating around 2% of its worst performers, with poorly performing candidates selected via an appraisal process that has three levels: "exceeds expectations;" "fully meets expectations;" and "partially meets expectations."
However, in the European real estate team within the asset management division, insiders say cuts are closer to 25% of investment professionals and that some of those cut were "well-liked, well-regarded and technically very competent."
Goldman declined to comment on the complaints, which might be dismissed as the gripes of a people left behind after their friends have left. The realty management division (RMD) investment team, which was previously around 35 people, is now understood to be around 25 in Europe.
However, as Goldman reorganizes into fewer and larger divisions, the RMD exits might have broader implications for the firm. The team sits in a unit created in 2019 that combines Goldman's historic merchant banking division (MBD), its special situations group (SSG) and its real estate group. The grumblers suggest that people from the legacy SSG team were disproportionately targeted for exits, whereas the legacy MBD people got off lightly. In the new team, most of those in charge allegedly started off in MBD.
If true, the implication is that even in the most impartial of processes, some partiality may creep in. If so, it's an unsurprising manifestation of human nature, but it could have consequences as divisions are restructured. It helps to be on the side of the team that comes out on top.
Photo by JACQUELINE BRANDWAYN on Unsplash
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