As with JPMorgan, so with Goldman Sachs. Goldman reported its fourth quarter and full year results for 2018 today and revealed that the two banks are both fishing in the same pool for talent. They both want....technologists.
"Headcount increased 9% during 2018, reflecting an increase in technology professionals and investments in new business initiatives," said Goldman in the notes accompanying today's release. The firm added 3,000 people last year, but average compensation per head fell (to $337k).
At Goldman Sachs, 'new business initiatives' mostly means Marcus, the firm's new online consumer bank. In the U.K. Goldman is adding 250 people in a new Marcus-focused office in Milton Keynes. In the U.S. it's hiring around 200 people in Dallas. As we reported last week, Goldman is having trouble attracting interns to its U.K.-based Marcus operation. The firm today confirmed that it also wants to build a cash management business in 2019, along with an alternative investing platform, and a mass-affluent business for Marcus.
It's Goldman's enthusiasm for technology and therefore technologists, however, which really stands out. If Goldman added around 500 people from Marcus in the past year, it's safe to assume that a high proportion of the other 2,500 hires were in the technology division. The firm increased technology spending to $1.023bn last year, an increase of 14%. JPMorgan also increased its 2018 technology spending by 14%, to $8.8bn. That the two top tier banks in the industry are ramping up their technology spending in tandem is an indication of where the big growth in the industry is now.
As Goldman focuses on growth under David Solomon, the firm also said today that it plans to, "leverage technology to create best-in-class client experience across more products," in sales and trading and to use technology to "invest for scale." There's no mention of hiring extra M&A bankers or traders - however well Goldman's M&A business did in the fourth quarter.
Around 51% of the 1,424 jobs Goldman is currently listing for experienced personnel are in its 'engineering' division. Today's results, and the accompanying presentation, suggest engineers will only become more important at Goldman Sachs in future.
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