What are the key lessons from GS / MS layoffs?
I work in a coverage group @ GS in Europe and had several colleagues laid off over two rounds in the last three months. During this latest round of layoffs a few associates were let go and they were told that i) the layoffs were not performance related (several of these associates worked hard and were solid performers) and ii) that they would not receive a bonus after working diligently for 12 months.
My question is how to interpret this latest round of layoffs as someone still employed @ GS and the associates / employees that were let go?
For the former, is the lesson just to "work harder" and ensure you are more "politically connected" so your name isn't called when layoffs come? For the latter - how does one not become cynical and what should be their takeaway when they grinded for a year with solid performance and were shown the door?
1.) Luck and politics play a large role, including people looking out for themselves and eliminating perceived "competition"
2.) Finance is a cyclical business. The business cycle and credit cycle do exist. It's just that everyone under the age of 34 has no concept of a down market
3.) Risk / reward: you get paid a lot of money but you take a lot of risk regardless whether you notice it
4.) Life is unfair. Get used to it. Tired of everyone thinking life is deterministic and if you work hard you'll always be rewarded.
Good comment. What is your view on what being let go "not based on performance" actually means in non corporate speak? Simply that you didn't play politics well enough when we started evaluating who should be let go?
I can speak to my situation specifically. I was let go in a group where I’d been consistently top bucket and would have been for this year as well. MDs I had primarily worked with left and new ones came in bringing new teams. Other associates my level were either these new joiners or diversity (and good high performing people as well). Unfortunately just odd man out and shit luck at a bloated position. Sometimes life is unfair.
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What do you mean by politics? Are you talking about expressing your views to senior management or am I thinking this wrong? I keep seeing politics is always a major issue towards advancement or actions within the job itself.
For the most part, there's a minimum level of intelligence / hard work to get the job done. Once you have that, the differentiation between people is office politics / getting people to like you. Have you seen Harold and Kumar? Think about the cliché hard-working, quiet Asian-American who will get dumped on a bunch of number crunching work, vs. the still smart but good-looking, sociable white guy who then goes to dinner with clients and plays golf with his bosses on weekends. The former may be better at the labor of the job, but when it comes time for advancement opportunity (and not getting laid off), the latter wins
Office politics, not government
Being liked, popular, etc. Cmon.
Always go BB
Biggest determinant is motivations of leadership and market performance. Ie is outside of your control. Assuming you weren't complete horseshit.
Update your CV periodically. Keep in touch with headhunters. Create an emergency fund.
1. Don't choose GS over other US BBs just for PrEsTeEge
2. "How does one not become cynical?" - is there such thing as working for a US BB and not becoming ultra-cynical lol?
3. ALWAYS speak with recruiters and have multiple back-up plans. This is a brutal sector where you sign up for an option to be fucked but this should be mutual and you should be ready to move on with no regrets
4. Follow your own agenda and do not buy into "loyalty" BS / additional few 000s of $$$ / prestige talking banks use to keep us in the job
5. "Solid performance" is overrated, it is politics that win over hard work in IB - at the end of the day your seniors sell air / second view on a transaction (aka "advice") to their clients who are taking view themselves, so your work as a junior doesn't matter much unless there is a major fuck-up / obvious mistake
6. It is just a job at the end of the day
Is the logic on number one that other BBs will be less likely to fire? I mean, we saw a lot of the banks do layoffs so I am not sure that this one holds 100% true.
I cannot believe that they won’t pay bonuses, that is an extremely poor move.
I have laid people off, for both performance and due to budget cuts (you can argue that’s performance based too, but it’s not the same) and I have always made sure people get their pro rated bonuses, especially in the budget cut case. If you are working hard and we F’d up (bad returns, etc) I’m not going to protect my bonus and F you over, especially when it is such a small dollar amount for the juniors. I can’t believe people use that to protect their profits (fine I can believe it, but it’s in such bad taste).
You sound like a good boss, I'd work for you
The only lesson is don’t tell anyone you are resigning until they day you are doing so. Looks like firms don’t have any qualms fking you out of a bonus so don’t give them any extra reasons to do so
1. Performance doesn't mean fucking shit at non-revenue generating levels. If you're not in position to produce revenue (and been generating $) then your fate is entirely coin flipping. Being able to make slicker ppt slide or more proficient at excel does not help when time calls for 'game of thrones' type of office politicking shit.
2. Your coworkers are not your friends, there will be backstabbing when people fight for a chance to stay. If you have the chance to undercut the chance others will stay, do it. Don't afraid nuking professional relationships because people who are canned very likely have to switch industry, you probably wont see them again. (especially in this prolonged rolling bear market - any motherfucker said this cycle is brief is an idiot, this is secular, extended decline).
3. Your resentment should be directed towards the FED & other central banks, not your employer. Stupid cunts with their 'transitory' narrative, their kicking the can down the road, their endless QE the decades prior, endless failures. Work is established on multual agreement with clauses in the event of business downturn. Employers ain't parents they don't have responsibility to look after you. If you're still pissed, then 1 star Glassdoor review there you go.
What do you mean by this is secular, extended decline?
Meaning the market won’t crash and will be flat or down for a long time
De-globalization = persistent inflation = persistently high interest rates = muted financial activity. For years.
The lesson to be learned.
nice one turning down internal audit at gs
did you pick someone else cuz you saw this coming, or what? GS does seem to be on a landslide lately
I'm in the UK, I considered the cost/benefit of working at GS (or any BB for the matter) and decided that a more 'relaxed career' in biglaw would be better for me so I went with a law firm which is known for its PE and Rx practices. But maybe next year I'll reapply so I know for good that i'm not missing out on anything.
Don't lateral to competitive banks if you are at a low tier bb or mm. You are first to get axed, and will be surrounded by hardos willing to knife you in the back. Stay at your crappy bank and build trust with the seniors there.
Dude I'm still a junior and it boggles my mind that some of the smart people I've worked with could not see this, they were always jumping from place to place for the extra prestige and are always surprised that they're cut when shit gets real. How do people not realize that if you're constantly lateraling people see you as unreliable and if you start at a grad program at a bank despite what people will tell you, the bank will be slightly more loyal to you in times of cuts than the guy who just joined last year no matter how good he is.
Not too mention if you had to settle with a lower tier bank...you probably are a lower tier candidate. Not saying you can't kill it at gs but the gs kids have been killing it earlier than you have......
This is me. Came in to banking from an unrelated industry, moved up in banks, and then ended up getting LIFO'd. Still ended up being good for the resume, but man am I salty.
Still won't protect you from layoffs. Best move is to lateral to a top tier firm as even if you do get laid off, there's still jobs to exit to which would benefit from the branding
For all of the Goldman bankers, they should leak every deal they know about to the WSJ, and if WSJ won't take the story, work your way on down the list of media outlets, to try and harm Goldman's reputation.
Goldman screws over associates and VPs by not paying a bonus, the associates and VPs should screw Goldman by injuring the firm's greatest asset (its brand, which Mr. DJ is doing his best to destroy).
Was it a coincidence that the Subway sale process leaked the same day as the layoffs? I doubt it. Punch back.
I would 1000% do this. Leak every deal to nypost wsj etc.
Every damn public deal I know being worked on.
Too bad GS already famous for this. Any time there a Bloomberg article says sources says xxx public company has an advisor and is taking bids, chances are GS is their sellside advisors.
>hey guys let's violate both fiduciary responsibility and potentially insider trading laws also
Nice try feds.
You are very wrong on every account. If you’re not an employee of the firm, you would no longer have a fiduciary responsibility. Backing up from that, bankers act as agents, not principals, and don’t have fiduciary obligation in the first place. It’s also not insider trading if you don’t benefit from it.
At worst, it would be in violation of the NDA that the employee signed with the firm and endures past termination.
MS barely had any layoffs
What's the view on the layoffs and diversity? I'm interested in hearing views from GS people vs the rumours in the market I've heard.
The rumours I heard from a few people at GS was that diversity employees and women were basically protected from the layoffs as a whole (with only the truly bad bottom bucket diversity/female juniors getting cut).
Anecdotally, all of my friends who were white guys got the axe, they said women were largely protected.
On a similar note, my bank hasn't done layoffs but had a very low return offer % rate last summer due to macro environment, and the only SAs who received return offers were the ones who were recruited into the internship via the bank's female diversity program.
A friend at GS London fully denied that women were protected, said three 'diversity' female employees sitting close to her were laid off
it’s never that simple. hearing layoffs were a very mixed bag
Lot of new joiners believe that they have achieved everything in life once they land up at one of the top 5 Investment Banks. Seldom they know the reality till it hits them really hard. Key lessons are:
1) Be prepared for the worse. Joining an Ivy League Bank is like going on a war. You always have to be on your toes as you are working or competing with one of the smartest brains on this planet.
2) Industry is cyclical and not secular. If you get in at the wrong time of the cycle then you will have really hard time in surviving. Not that you can do anything about this and is pure luck. But atleast be aware of the reality
3) Realising that it is just not about the hard skills that matter, but also soft skills and how you gel or build rapport with your seniors and colleagues so that you are not in the 1st lot of the firing list
4) Be humble and grounded as your ego can kill you more than anything else. Help others in their bad times and so karma will do the same with you.
5) Always invest in yourself by upgrading your knowledge & skills. Good product will always be in demand no matter what the market is.
6) Networking with right people is key. Be in good circles of resourceful and knowledgeable people. This is the most important asset if you ask me.
Lots of good comments here, and agree with many of the posters. One thing I will add that I think deserves consideration is that during periods of economic downturn, working for a more secure employer pays massive dividends, far greater than that additional 10-15% premium associated with the highest paying offer when comparing and contrasting offers.
I don't mean to say don't do IB because of the inherent recessionary risk, but be smart in your DD of different banks. Some small banks run so lean they cant lay off their juniors because they are extremely valuable given their output relative to their salary. Other banks have no problem chopping junior heads right out of the gate. If you can, while doing your DD, understand if the bank you're interviewing would likely retain or let you as new business slows. Obviously you cannot quantify the odds, but you can talk to past juniors who worked there or dig into specific bank's general reputation when it comes to layoffs.
Additionally, this is just as applicable when looking at the buy-side. I can really only speak to Corp Dev here, but there is a massive difference between being on the Corp Dev team of say an Ares port-co vs. a Proctor and Gamble. When your owners keep a very long-term outlook, your odds of remaining employed can increase dramatically.
My general advice / TLDR: if you are weighing two different offers right now, please make sure you are factoring in your retention odds as the outlook for 23/24 doesnt look particularly balmy.
- Always, always ALWAYS be networking. The buck doesn't stop once you land your first offer. Those who kept at it are not running after headhunters when they get cut
- Luck, soft skills and perception within your group are just as important as technical ability
I can’t stress enough how important perception is. This comment needs far more bananas.
take the JPM offer
A lot of people that get into investment banking are risk averse, and they feel like banking is a safe path. They feel like they made it once they get hired by a bank - especially a BB. However, when it comes to having a job anywhere you have to remember that it doesn't work like that.
1. Politics are just as important - if not more - than hard work. A lot of people feel that if they just work hard and don't screw up then they are always guaranteed a job. You can do everything right and still get let go for things that are not in your control. You can be a hardworking star employee and be let go because you had shit luck.
2. Banking isn't necessarily a "safe" path. You should always be stacking and investing your money like you can be let go at any time. Don't ever count on any employer to keep funding an overextended lifestyle.
3. Don't get too comfortable anywhere. Again, there's so much out of your control that you never know what could happen. Always have a plan or two about what you would do if you were let go and always keep an eye out for other opportunities even if you're not going to take them.
4. Always keep a strong network that you can leverage for anything.
5. Don't ever let your job become your identity or assume your company and co-workers genuinely give a fuck about you - they don't.
There is no guaranteed safe path in this world. Banking isn't going to guarantee you security - no job will. Use your banking experience to stack your money, build a network, and gain experience. You can do a lot with the money you make from banking, the credibility you can gain from working at a BB like GS, with the network you build, and the experience you gain. You have to understand that your spot is never secure.
Here's why you shouldn't be cynical. The question isn't "might I just be shown the door after working hard." Certainly bad things can happen unfairly. The question to be asking is, what's the correlation between hard work and long-term success in this industry?
I think that correlation is high. The industry knows that layoffs happen frequently, and often impact good people, so there's very low bias against laid-off folks in the hiring process for the next job. Furthermore, when a laid-off person has former colleagues willing to tell the next bank that they were good, that can do a lot to help get them hired.
So those are some mitigators within IB specifically. When you expand it to broader finance, there's even more. Say someone gets laid off from a bank and has opportunities in Corp Dev. Those roles can vary greatly in terms of desirability. That banker's hard work at the bank will probably be the difference between getting the better CD gig vs. the not-so-good one.
Just a few examples but the point is, if you look at where someone is later in their career, there's a strong correlation between work ethic and success.
This is absolutely true. Even if you have some rich parents, I have yet to see anyone who's successful and lazy at the same time.
Here’s a lesson. Investment banking isn’t a great career choice in 2023 and moreover isn’t really a career in the classical sense (30+ years in a sector) for 99 out of 100 people.
So what do you consider to be some great careers (finance or others) in 2023 and perhaps for the next 10-20 years? What do you look for in a career?
Environment looking bleak especially for current UGs...
The lesson to be learned here is that the GS/MS layoffs are a small taste of what happens to major companies post M&A to generate “synergies”. It’s easy as a junior employee to just mindlessly grind through and do work without seeing the big picture but take a step back and realize how much pain many of these high profile deals ends up causing the average Joe. They never see any of the efficiencies, but find themselves out of a job and those that remain see their salary go down and work demands increase while prices rise and product quality decreases. Sometimes people don’t feel empathy or don’t really think about this until they to experience pain, so now is the time to reflect and think about how people and society are effected by these M&A deals. With that in mind, do you really want to be a part of a machine that crushes honest, everyday hard working folk to the ground to consolidate wealth and make some multimillionaire/billionaire even richer?
Thanks Lina Khan.
Glad you can explain capitalism to us.
Corporatism isn’t capitalism. Capitalism is a spinoff of monopolistic competition while modern day capitalism is a cross between oligarchical competition and government sponsored socialism.
Same as it's always been.
Anyone treating banking as a viable long term career is a fool. It's a horrible job with slavery hours + the added benefit of working with some of the biggest sociopaths and worst people imaginable. The money does not make up for what you have to endure on a daily basis and not being able to enjoy a normal life. You can earn a decent enough salary pursuing a number of career paths outside of banking.
The smart people do their couple years and GTFO.
Don't be fooled by the woke BS narratives that HR and the management teams of these banks try to push and become misled into thinking they "have your back." They're empty, meaningless words and the job is as bad as it has ever been. Why any intelligent person does banking in 2023 remains a real mystery to me. Some people just have no purpose in their lives and are content with moving around numbers on a screen. Good luck to all
Could not agree more
Exit ops
As a VP, do you plan on leaving soon and what would you exit to? Just wondering if you feel this strongly against banking and presumably have your "couple years" done, why keep going if the money isn't worth it?
They're just a hypocrite.
I know you haven’t mentioned the coveted PE exit op but to your point of GTFO after you put in your time, 90 percent of the time the grass is far from greener in PE land or even at HFs. Finance as a whole can often suck despite the insane salaries relative to any other gig. The cyclic nature of the business and awful personalities is unfortunately part of the deal.
The lesson - start your career at the right time in the right market and ideally in the right group or at least working on the right product. Then also do things right and take copious amounts of notes.
The list is missing the most critical - make sure that you are getting born at the right time, at the right place and in the right family ;)
Lmao
Damn, this place looks different
Right? But at the same time, very much the same.
Haha so true.
WSO popped in my head and you (and DM/bfin) were some of the old names I hadn't thought about for a while.
Is there a WSO Masters forum where I can go be jealous of all the PE partners and billionaires? is Brady there?
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