Goldman Sachs slashes partnership ranks
The investment bank continues to perform strongly, however, and most former employees will probably do just fine, too.
The New York investment bank has reportedly slashed its number of partners to 407, down 31 from nine months ago. While it may seem like a sign that Goldman Sachs is struggling, nothing could be further from the truth. For the last quarter, Goldman Sachs reported better-than-expected results and hiked its dividend.
Goldman Sachs workers don't have it as good as they used to. The company has ended a 25-year-old program that offered two-year contracts to most analysts hired out of college, according to The Wall Street Journal. Perhaps fewer Goldman bankers can count on car service to ferry them back to their posh homes after a late night at the office. Like every other company in this economy, Goldman Sachs is doing more with fewer employees. It's a strategy that seems to be working.
Most of the laid-off Goldman Sachs workers will probably land on their feet somewhere in the financial services industry, though it may take a while and they may have to settle for less pay. This will affect the economy of the New York City area because Goldman Sachs partners use their bonuses to buy expensive clothes and cars.
Before readers start organizing benefits on behalf of Goldman Sachs workers, the company still takes care of its own very well. The company has set aside $10.97 billion for compensation this year, up 10% from a year ago. That works out to $336,442 per employees, an increase of 15% from 2011. Though that looks like a huge number, people need to remember that Wall Streeters have big costs as well. The average monthly rent for a New York City apartment is about $3,418, an all-time high, according to The New York Times.
Granted, the plight of these former kings of the universe might not seem quite so serious to the millions of Americans who continue to struggle to make ends meet.
Jonathan Berr does not own shares in GS. Follow him on Twitter@jdberr.
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