Goldman Sachs: "The market for talent remains robust"
If you're a banker or trader who's lost your job in the past few months, you might feel apprehensive about the future. Thousands of people have been let go from banks since October. Thousands more are expected to go by February.
Anecdotally, though, demand for banking talent is still strong. People let go from Goldman Sachs and Credit Suisse tell us they're been hotly pursued by recruiters. Speaking today, Goldman Sachs' CFO Denis Coleman suggested this is unsurprising. "The market for talent remains robust," said Coleman. Rivals still want to hire Goldman's "excellent people," he added.
This will be a salve to the concerns of Goldman's investment bankers who are bruised by job cuts and the promise of dramatically lower bonuses. Goldman has cut compensation expenses, but it can't cut them to the bone because it needs to keep staff happy for the recovery, explained Coleman: "We need to make sure we’re in a position where we can deliver for shareholders in 2023 and beyond."
Ongoing demand for staff explains why Morgan Stanley, too, hasn't cut pay by as much as might be expected. Only Credit Suisse, which can retain its bankers with the promise of stock in CS First Boston seems willing to throw bonuses in a ditch.
Of course, banks don't only employ highly paid, highly desirable client facing staff. Coleman also said today that Goldman's ability to cut compensation was constrained by the need to remunerate its support staff. Goldman's employee base includes a "relatively large number of people that earn less money," said Coleman; these people are impacted by inflation and are important to the firm. Where possible, he said that Goldman has been implementing its own redistribution scheme and trimming pay for its highest earners so that its lower earners suffer less.
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