Goldman Sachs has slashed its workers’ bonuses by as much as 90 percent after news about the company’s massive layoffs made rounds just last week, a source said.
According to sources by the New York Post, junior bankers on Wednesday learned that they would receive only $10,000 to $15,000 in bonuses in contrast to their six-figure bonuses last year, even after working 100-hour weeks.
In 2022, the average analyst bonus reached $95,000, while those at the vice president level got an average bonus of more than $500,000, as per the outlet’s sources. The company also raised its first-year workers’ base pay from $85,000 to $110,000 and $210,000 to $250,000 for vice presidents.
The bonus pay cut comes after the Wall Street company’s massive layoff of over 3,000 employees hit the news last week. Reuters reported that the layoffs would be the largest since the 2008 financial crisis.
The layoffs will possibly affect most of the bank’s major divisions, especially Goldman Sachs’ investment banking arm, the outlet said.
Employees who put in hours of work are disappointed at the recent news, according to the New York Post.
“We all knew it was coming because of how much they are cutting back,” one worker said, according to the New York Post. “But it doesn’t mean it makes it easier.”
Meanwhile, executives argued that the company still maintained their pay-per-performance culture. However, Goldman Sachs’ revenue reportedly slumped by 66 percent last week compared to 2021.
“While compensation expenses were down 15% for the year… We always strive to maintain a pay-for-performance culture,” chief executive David Solomon told the New York Post.
“With revenues down, compensation was lower. That said, we also recognize that we operate in a talent-driven business, and we must continue to invest in our people whose dedication is critical to our world-class franchise.”
Earlier, Reuters reported that Solomon sent a year-end voice memo to staff warning of a headcount reduction in the first half of January. The company, however, declined comment on the memo.
Chief Financial Officer Denis Coleman also told the outlet that overall compensation was down 15 percent and headcount was up 10 percent, meaning less money could be distributed to the workers.