How many people is Goldman Sachs planning to move out of the City of London because of Brexit? Officially, the bank’s saying nothing: it’s still in the contingency planning stage etc. etc. Unofficially, rumours are swirling about big, big numbers and senior staff are said to be eyeing their futures elsewhere.
“It’s going to be the ops and regulatory risk people who are moved in big numbers first,” says one consultant with knowledge of the bank’s plans. “Some of the European sales guys are already being asked if they want to go “home” and a number of the senior IBD guys are preparing to move to Europe in the next few months. The rest are being told the situation’s fluid and will be subject to review every three months, but the expectation is that a lot will ultimately go.”
Last month, German newspaper Handelsblatt reported that Goldman was planning to move 3,000 jobs out of the City of London and to disperse them between Goldman’s offices in Frankfurt. New York City and Warsaw, with senior relationship managers covering France and Spain relocating to Paris and Madrid. The bank denied this at the time, saying nothing had been decided, but with the British government still providing little information on its Brexit negotiating stance, those harsh plans are still understood to be on the table.
Goldman Sachs International was registered in London in 1988. By 1989 it employed 715 people (420 in the front office and just 295 in the back office) on an average of $18k each. Over the next two decades, headcount and pay grew exponentially, until the firm hit a wall in the financial crisis. Things have partially recovered since, but they’re still not quite the same.
If the worst of Goldman’s Brexit contingency plans for its London office come to pass, the firm could end up with fewer staff in the City than at any time since 1999. Brexit will have achieved what Asian crisis, the bursting of the dotcom bubble and the financial crisis all failed to do: compel Goldman Sachs to completely restructure its operations in Europe.