Goldman Sachs might be about to cut staff in London because of Brexit, but last year it was still adding staff in the City and increasing their pay.
Goldman has just released its annual report for Goldman Sachs International. It shows that Goldman added 94 staff in London last year and increased average pay by 5%.
Goldman had 5,716 full-time staff in its UK operation at the end of 2016, up from 5,622 in 2015. Admittedly, this was an increase of just 2%, but Goldman was cutting staff last year. Globally, 2,400 jobs went. The firm made multiple layoff announcements in its New York, and headcount in the Americas fell by 5% – or 900 people. Outside the U.S., Goldman’s headcount was down by 8% last year.
Goldman didn’t cut London headcount last year, even though staff there are more expensive than the rest. Average pay per head among its UK employees last year was $419k – up from $399k in 2015 – compared to $338k across the firm.
London bankers must be doing something right. As the chart below shows, the only significant reduction in the UK last year was among temporary staff and contractors, which fell by 22% year on year. The investment banking division, the investment management function and the investing and lending section, which makes loans and private equity investments, were all expanded. And even though Goldman is moving its support functions from the UK to Poland, it’s been adding more back office staff. The firm now has 2,801 people in support functions in London – up from 2,755 in 2015 – and just 300 in its Warsaw office.
Still, Goldman’s London sales and trading function is being chipped away – it now has 1,383 people in its institutional client services function, down from 1,407 in 2015.
Last year’s London growth could yet be reversed as Goldman initiates its Brexit plans. Richard Gnodde, CEO of Goldman Sachs International says the firm’s planning to move “hundreds of roles” out of the London as it prepares for the UK’s exit from the EU.
If Goldman starts shrinking in London, it will be a reversal of years of growth. Headcount at Goldman Sachs International doubled between 1999 and 2015. Last year it inched up again. Will 2017 be the year it starts falling back?
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