- Goldman Sachs’ CFO Stephen Scherr said Monday that the firm is forging ahead with previously-made plans to divert employees out of traditional banking capitals like New York, London, and Hong Kong.
- The firm will work to move more operations to lower-cost cities where it already operates hubs, like Salt Lake City, Dallas, and Bangalore.
- “I think that will drive some considerable cost savings for us as we reposition populations and businesses into more affordable locations around the world,” Scherr said while speaking at a Bank of America Merill Lynch virtual conference on Monday.
- Visit Business Insider’s homepage for more stories.
Goldman Sachs is forging ahead with continued plans to divert more employees out of traditional banking capitals like New York, London, and Hong Kong, in favor of relocating them to lower-cost cities including Salt Lake City, Dallas, and Bangalore.
After months of unorthodox work arrangements during the coronavirus pandemic, Goldman is now feeling a “much greater degree of confidence” about stationing “larger aggregations” of employees and business lines in those cities, said Stephen Scherr, Goldman’s chief financial officer, speaking on Monday at the Bank of America Merrill Lynch Future of Financials Conference.
“I think that will drive some considerable cost savings for us as we reposition populations and businesses into more affordable locations around the world,” Scherr added.
Goldman’s relocation efforts are part of a broader strategy laid out at the bank’s Investor Day in January, aimed at slashing $1.3 billion in costs over the course of three years.
Earlier this year, John Waldron, Goldman’s president and chief operating officer, explained at the firm’s Investor Day on Jan. 29 that as many as one third of Goldman’s global workforce — which numbers roughly 40,000 — had already set up shop in “key strategic locations,” including Salt Lake City, Dallas, Bangalore, and Warsaw.
“Our goal is to increase this percentage and get closer to 40% over a reasonable period of time,” Waldron said, according to a transcript of his remarks at the January event. “Our investment in these strategic locations enables us to build centers of excellence around specific capabilities that support our business initiatives, AI, cloud and data analytics.”
Waldron’s Investor Day presentation also specified multiple ways in which Goldman foresaw achieving the $1.3 billion in cost cuts. Among them, what the firm called “campus consolidation,” and the push to divert employees in costlier cities to lower-cost ones, which feeds into its real-estate cost savings strategy.
A representative for Goldman Sachs declined to provide further comment to Business Insider.
Goldman has been moving employees to lower-cost cities for several years
Goldman Sachs has long seen an expansion into locations like Salt Lake City as a boon for its back-office operations, as Business Insider has previously reported. Shifting back-office activities to cities that don’t come with high overheads, like New York and London, plays a key element in the bank’s cost-cutting strategy.
A recent example of Goldman’s continued staffing efforts came earlier this year, when the company posted jobs in late March for positions in Salt Lake City that didn’t require a college degree, as Business Insider previously reported. Such roles, like one for a process coordinator, were still being offered on Goldman’s website on Monday morning.
Meanwhile, re-basing employees isn’t the only way Goldman is cutting costs this year. Goldman kicked some job trimming measures back into gear this fall after suspending any cuts during the initial height of the pandemic.
Bloomberg first reported in late September that Goldman planned to reduce its headcount by about 1% of its overall workforce, or approximately 400 positions.
Leave a Reply
Leave a Reply
This site uses Akismet to reduce spam. Learn how your comment data is processed.
