Comments on: Job insecurity at Goldman Sachs http://blogs.reuters.com/felix-salmon/2012/06/04/job-insecurity-at-goldman-sachs/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: selenestephens http://blogs.reuters.com/felix-salmon/2012/06/04/job-insecurity-at-goldman-sachs/comment-page-1/#comment-49491 Fri, 21 Mar 2014 08:32:34 +0000 http://blogs.reuters.com/felix-salmon/?p=14680#comment-49491 Payday Loans No Credit Check Same Day – 24monthloansinstantdecision247.co.uk

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By: MKCurious http://blogs.reuters.com/felix-salmon/2012/06/04/job-insecurity-at-goldman-sachs/comment-page-1/#comment-39899 Tue, 05 Jun 2012 22:44:44 +0000 http://blogs.reuters.com/felix-salmon/?p=14680#comment-39899 Moreover, at Goldman, the value of any given employee is far more quantifiable than it is at most other firms.
This isn’t precisely true. Just because a trader made $5mil in trading profits and his colleague made $10mil in M&A doesn’t mean that it’s easy to just compare the two. Even within trading, luck and risk-taking can lead to higher returns for a given employee without their actual value to the firm being higher.

If you think about it historically, the modern bank bonus system is a creature of the past several decades, and is still more common in the US and UK than in Germany, Japan, and France. The ability of US banks to accurately assess employee value is a myth that’s part of their overall culture. It’s like assessing a journalist for their wordcount or a programmer by lines of code.

Your point about Romney is interesting though, because it’s almost amazing that someone with his background is competitive for the presidency. If he had started up some division at Citi, or done something more financial-looking than Bain, he’d have been thought of as a banker and likely had his chances diminished (rightly or wrongly, after all financiers like Corzine have been elected to governorships!). But through an historical accident of sort he ended up on the right line between wall/main street since private equity looks very businessman-like from afar.

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By: FinanceChicken http://blogs.reuters.com/felix-salmon/2012/06/04/job-insecurity-at-goldman-sachs/comment-page-1/#comment-39895 Tue, 05 Jun 2012 20:13:18 +0000 http://blogs.reuters.com/felix-salmon/?p=14680#comment-39895 Goldman is not generally associated with big cuts, they tend to fire people yearly as part of their performance evaluation, so even a small number like 50 is making news.

The compensation and promotion process at big banks IS different (more brutal) then the rest of the economy, but they are making a mistake because the ultimate result is a broken culture of hyper-competitive back-stabbing pr*cks… see this for what I mean:

http://thatretiredguy.blogspot.pt/2012/0 5/some-day-financial-innovation-will-onc e.html

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By: KenG_CA http://blogs.reuters.com/felix-salmon/2012/06/04/job-insecurity-at-goldman-sachs/comment-page-1/#comment-39886 Tue, 05 Jun 2012 16:14:08 +0000 http://blogs.reuters.com/felix-salmon/?p=14680#comment-39886 If Goldman gets rid of 50 employees, it’s not a layoff, it’s getting rid of low performers. 50 is far less than 1%; companies don’t “lay off” 0.15% of their staff. They’re trying to ease the blow for the terminated workers, by letting them tell future potential employers they were laid off rather than fired.

And don’t assume they were all “investment bankers”. Yeah, that used to be Goldman’s main business, but now they have lots of traders, financial advisers, and gamblers, and those kinds of people don’t get laid off, they get fired because they aren’t pulling their weight.

Curmudgeon, the topic is already a political one, so Felix wasn’t injecting politics into it. Probably the biggest issue in the election this year will be jobs, or how to create more of them. Romney makes a big deal about how he knows how to create jobs and run a business, when his expertise is not in running a business (and certainly not in creating jobs), but in extracting as much value as possible out of an existing company,and then finding somebody else who wants to own and run what’s left. Not that that has lots of parallels with running a country.

I also run a company that hires SW engineers (or at least tries to), and I’m with skyman. The whole idea that uncertainty about the taxes keeps me from hiring more people is nonsense. The only thing that keeps me from hiring more engineers is that our industrial base moved overseas, and took most of the engineers with the expertise we need with it.

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By: skyman123 http://blogs.reuters.com/felix-salmon/2012/06/04/job-insecurity-at-goldman-sachs/comment-page-1/#comment-39876 Tue, 05 Jun 2012 13:04:08 +0000 http://blogs.reuters.com/felix-salmon/?p=14680#comment-39876 I’m here in the real world as the CEO of a SW company, so I’ll chime in here. The ONLY thing that gets discussed is revenue when making these decisions. Revenue is down, revenue stays down, decisions get made. The first people to go are the people responsible for revenue if they haven’t been pulling their weight. SW people go when we scale back projects because the revenue was down. Frankly there’s so much institutional knowledge after a while that it doesn’t even make sense to look at who goes by wage. Most of the time we’d go for more lower-wage people and keep the top ones in all honesty. So if you’re a high wage earner and you’re let go, perhaps it’s because you felt entitled and weren’t judged to be producing at a capacity relative to what you’re paid. Period.

We don’t look at taxes (the Republicans lie about this constantly with the “unsure about taxes so they’re not hiring” meme), we don’t look at wages, we look at REVENUE. In fact the sales people are the first to feel the heat and possibly the ax. Perhaps even the CEO if he’s perceived to be not doing enough or leading in the wrong direction (that’s how I became the CEO in fact).

So all of this can be summed up in one question/answer: why are people getting laid off and companies are reluctant to hire? REVENUE. Incidentally what Mitt did has no relation to all of this Felix is correct. His job was to turn around/unlock value. That’s a whole different ballgame. He’s a car stripper for parts, if you like that analogy. I’m into designing and building the cars. Very different.

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By: Curmudgeon http://blogs.reuters.com/felix-salmon/2012/06/04/job-insecurity-at-goldman-sachs/comment-page-1/#comment-39875 Tue, 05 Jun 2012 12:40:50 +0000 http://blogs.reuters.com/felix-salmon/?p=14680#comment-39875 FifthDecade, Felix seems to revel in inserting politics into most discussions. I try to keep it out of polite discourse, believing that all politicians are pretty much the same (namely, evil), with differences only in nuance.

Ultimately, it’s his blog, he can do what he wants. As for destroying the economy, what happened in the US starting a decade ago is happening in Europe now (for somewhat different reasons). When the rest of the world can meet your technical, manufacturing, and professional standards at a lower standard of living, nothing was going to prevent an a leveling of the value of that work. The developed world has managed it badly, but we manage most things badly.

I believe you live in Switzerland. I will be in Zurich the week after next, and love it there. If I had any excuse, I would live there in a heartbeat.

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By: FifthDecade http://blogs.reuters.com/felix-salmon/2012/06/04/job-insecurity-at-goldman-sachs/comment-page-1/#comment-39874 Tue, 05 Jun 2012 12:15:16 +0000 http://blogs.reuters.com/felix-salmon/?p=14680#comment-39874 @Curmudgeon I think you do Felix a disservice here… Mitt Romney does position himself (and I’ve heard some of his supporters referring to it on TV) as someone who understands how the economy works because he’s a businessman. Err, no. He’s not,he’s a dealmaker, as Felix says, and one that then asset strips companies. It’s practices like that which have pushed Western jobs to China in order to make companies more profitable – and that ultimately destroys your economy by reducing the number of people you have working in it.

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By: Curmudgeon http://blogs.reuters.com/felix-salmon/2012/06/04/job-insecurity-at-goldman-sachs/comment-page-1/#comment-39868 Tue, 05 Jun 2012 10:51:50 +0000 http://blogs.reuters.com/felix-salmon/?p=14680#comment-39868 I have to agree with BarryKelly on SW jobs, although there’s also a great deal of regional variation which is only indirectly related to the cost of living. When people are let go from software companies, it typically has little to do with how much they are making.

And Felix, I don’t get your gratuitous jab at Romney, which you effectively refute at the end. And it had nothing to do with the topic at hand.

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By: Troyboy http://blogs.reuters.com/felix-salmon/2012/06/04/job-insecurity-at-goldman-sachs/comment-page-1/#comment-39867 Tue, 05 Jun 2012 10:14:59 +0000 http://blogs.reuters.com/felix-salmon/?p=14680#comment-39867 It was always the premise that IB guys got the high salaries to compensate for the volatility of their employment. The lengthy boom has let us forget that, and entrenched an expectation culture. This should be a good opportunity to remind us we get paid not to buy Porsches, but to save for a rainy day. No sympathy from me I’m afraid!

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By: umeshgeeta http://blogs.reuters.com/felix-salmon/2012/06/04/job-insecurity-at-goldman-sachs/comment-page-1/#comment-39864 Tue, 05 Jun 2012 04:35:18 +0000 http://blogs.reuters.com/felix-salmon/?p=14680#comment-39864 BarryKelly – not really. I have seen / experienced how SW Eng. bringing critical knowledge are valued internally over a period as well as how those are fired because ‘pay scale’ went above the bracket as market shifted down. Nothing special here….

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