Goldman Sachs CEO David Solomon isn’t getting ready to fire you in the coming weeks — but he may convince you to show yourself the door.
Insiders at the Wall Street giant say employees are on edge at the start of 2024 following a traumatic year that had kicked off with “David’s Demolition Day” — a chilly morning last January when the bank fired 3,200 employees.
But this month, with compensation slated to be announced the week after next, laggard employees are more likely to get a piddling year-end payout than a pink slip, according to sources close to the firm.
That’s despite the fact that it’s customary for the bank to fire underperformers the week before it announces compensation — a practice that can save banks doling out bonuses to outgoing employees.
Goldmanites were heartened that Solomon’s holiday audio message to employees last week was far cheerier than it was the year before, when he warned that mass layoffs would begin imminently.
One source described this year’s message as “scripted and rosy.”
“It was a calm message – thanks for working hard and have a good holiday,” the source said.
“As the year draws to a close, I wanted to convey my deep appreciation to all of you for your dedication and commitment to our culture, our clients and the firm more broadly,” Solomon said in the audio message obtained by On The Money.
“I won’t make predictions. The environment can always shift again, but I see reason for confidence that 2024 will be an exciting and productive year ahead for Goldman Sachs, where the power of our client franchise allows us to continue to differentiate ourselves in compelling ways.”
Nevertheless, sources with knowledge of management’s thinking say CEO Solomon and his team are betting on laggard employees leaving after getting disappointing bonuses.
Top brass is also optimistic that the market will take off, that dealmaking will resume — and that Goldman will need a large number of bankers to get the work done.
If anything, some at the firm are concerned the bank may see more exits than they’d like.
In a statement, a spokesperson for Goldman said, “Our compensation philosophy hasn’t changed, we’re always focused on investing in our people, especially our top performers. We’re not going to comment on speculation around the compensation cycle.”
Solomon has also emphasized the importance of paying for good people.
At the FT’s Global Banking Summit, Solomon said that Goldman will “pay for performance.”
Sources note that given the multiple rounds of cuts in 2023, there isn’t any fat left to trim — and that the bigger concern should be about retaining the top performers after what will be a dismal round of bonuses.
“The problem is bad people end up staying and good people leave” too often, a source says of retention at the firm.
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