Goldman Sachs’ newest cost-cutting initiative, internally nicknamed “Challenge Voyage,” will ask choose managers to maneuver from central hubs just like the financial institution’s downtown New York Metropolis workplace to rising areas like Salt Lake Metropolis and Dallas — or depart the corporate.
In line with a Bloomberg report, the funding financial institution is delivery its managers to rising locales to assist develop expertise pipelines in areas the place the corporate is rising, because of the efforts of primarily junior-ranking workers.
Transferring managers to Dallas and Salt Lake Metropolis might additionally permit Goldman to capitalize on workplace house. The price of renting a business workplace constructing in Manhattan was about $80 per sq. foot, in comparison with round $26 per sq. foot for Salt Lake Metropolis and Dallas.
In the meantime, Goldman is constructing a $500 million campus in Dallas in 2028 and is on observe to extend its present headcount of 4,600 workers within the space to five,000 by the point the workplace opens.
Dwelling and dealing outdoors of NYC additionally gives workers extra worth to their paychecks — NYC’s price of residing is 130% larger than the nationwide common, with a median hire of $7,749 monthly, per Payscale. In the meantime, Salt Lake Metropolis’s total price of residing is 10% larger than common, with a median hire of $1,944 monthly, and Dallas’ price of residing is 2% larger, with a median hire of $1,497 monthly.
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As a part of Challenge Voyage, Goldman Sachs is gearing to chop round 3% to five% of its 46,500-person workforce within the coming months. The Wall Avenue Journal reported earlier this week that Goldman will make cuts within the spring this yr, as a substitute of in September because the financial institution has carried out in recent times.
In line with Enterprise Insider, Goldman divisional heads are at present figuring out who to chop and relocate. Some jobs which can be misplaced by cuts this spring can be backfilled with roles outdoors of New York in lower-cost locales like Dallas.
In the long run, Goldman seeks to scale back bills by $1.3 billion total by shedding some workers and shifting others to lower-cost areas. The financial institution first voiced the target at its first-ever investor day in 2020, per Bloomberg.
Challenge Voyage started within the fourth quarter of 2024 as a multi-year initiative to avoid wasting the corporate cash, per BI. The layoff and relocation plan impacts a number of divisions throughout the financial institution, together with world banking and markets, engineering, advertising, and operations.
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In line with the WSJ, the layoffs will give attention to reducing the variety of vice presidents at Goldman. VPs, a gaggle between associates and managing administrators, are a big and expensive a part of the financial institution, with their ranks ballooning out far sufficient in recent times that VPs have been reporting to different VPs as a substitute of managing administrators, per BI.
Glassdoor information reveals {that a} Goldman VP can price the financial institution as much as $325,000 in base pay per yr. Third-year VPs can earn over $1 million in wage and bonuses, a Goldman headhunter advised eFinancialCareers.
