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Morning Coffee: Goldman Sachs leaking staff while J.P. Morgan stays solid. Compliance leader bored of job

Goldman Sachs fixed income layoffs

When we spoke to a Credit Suisse trader this week, he commented on the icy gusts of paranoia blowing through the bank in London. “You come in and see who’s gone. No one talks about it,” he explained. – “It’s like the Hunger Games.”  You might say a similar sort of chill is pervading Goldman Sachs.

Ok, so Goldman isn’t cutting 30% of its London staff in increments of 200-or-so like Credit Suisse, but it is making repeated small cuts to its trading business and no one knows exactly where they will end.

The Wall Street Journal reports that Goldman Sachs is cutting another 2% of its fixed income staff this week, bringing its running total to 10% of the fixed income trading division so far this year. How many people are affected? The Journal has no numbers, but back in January it reported that GS was cutting 250 people or 10% of its fixed income salespeople and traders – suggesting that this week’s eliminations amount to no more than 50 people, and that the cuts had been slated already anyway…

Goldman’s layoffs are interesting nonetheless. – Mostly because they’re in contrast to J.P.Morgan. While Goldman is cutting fixed income staff, J.P. Morgan is having none of it. The Financial Times points out that Daniel Pinto, head of J.P. Morgan’s corporate and investment banking group is still preaching the virtues of investing in fixed income currencies and commodities (FICC) while rivals retrench. To this end, J.P. Morgan  just appointed David Hudson to a new role looking at market structure, electronic platforms, and potential partnerships. Admittedly, Goldman Sachs has Jim Esposito doing something similar, but Esposito is now working in a climate of fear. Hudson is not.

Separately, Penny Judd, Nomura’s head of compliance, is leaving the bank. She seems to be doing so voluntarily: Judd told Financial News her exit was promoted by, “a desire to do something different”.

Meanwhile:

Leave Goldman Sachs, join Alibaba. (Reuters)

Hedge funds say they never take trading records established by traders at banks at face value: ‘Some who look good might just have been following a colleague’s successful trades.’ (WSJ)

Jefferies hired an ex- Morgan Stanley MD to trade municipal bonds. (Bloomberg)

Lamenting the lost world of Lehman Brothers: “You were right until you were proven wrong… Even at a junior level you got lots of responsibility.” (Financial Times)

The longer your commute, the less worthwhile your life will feel. (Financial Times)

The art of networking with bankers. (What I learned on Wall Street)

As Goldman Sachs released the worst first quarter results by a leading US dealer in April, it placed a video discussion with Game of Thrones co-creator David Benioff in prime position on its corporate website. (Euromoney)

True, he has no savings. True, he lives very meagerly. But he has two very well-educated and successful daughters. They are, in a sense, his retirement plan. (Atlantic)

Photo credit: Drip by Simon Bleasdale is licensed under CC BY 2.0.

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