Goldman Sachs' unwanted staff are getting a rescue package
It's been a horrible week for bankers at Goldman Sachs, especially for junior bankers in the groups hardest hit by layoffs. In London, insiders say juniors in the financial institutions (FIG) and technology media and telecoms (TMT) groups were particularly impacted, along with people in equity capital markets and leveraged finance. The cuts mainly hit juniors and VPs, although a handful of MDs were reportedly out too. They included Zeynep Yenel in financial sponsors, Mohit Sial in fintech coverage, Bertie Milward in corporate broking and James Brodie, who covered European gaming, leisure and real estate.
While Goldman people losing their jobs will forego 2022 bonuses and are being advised to start looking for new jobs ASAP, there is at least an upside to being junked by GS compared to a Deutsche or a Credit Suisse: the severance pay.
Goldman isn't commenting on exactly how much it's offering the people it's letting go, but the indications are good. Business Insider reported that people in NY were getting between two and three months' pay, plus extra for the number of years worked. In London, the Financial Times reported that two months severance is the norm.
This compares well to Deutsche Bank which has been paying the statutory minimum (one week's pay per year served for juniors) in severance pay in London ever since 2018, and which didn't pay for a notice period or extend health insurance in the US when it let go of staff in 2019. Similarly, Credit Suisse has cut severance pay to two weeks per year of service, meaning its unwanted juniors will get very small cushions indeed.
Although there's some grumbling that role-based allowances aren't being included in calculations of London severance, Goldman's generous terms make it look more like a technology or a crypto firm than a bank. When Coinbase announced its layoffs earlier this week, it said it would pay “a minimum of 14 weeks base pay (2 additional weeks per year worked), health insurance, and other benefits.” This might be why Coinbase people seem pretty ok with their new realities. In the midst of the horror, Goldman people could reflect on their good fortune too.
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