Net revenues at Goldman Sachs may have risen 17% year-on-year in the three months to June, but the firm didn’t set out hiring as a result. Instead, Goldman revealed today that it cut another 100 jobs in the second quarter. Since January, 1,000 Goldman jobs have disappeared – a decline of 2%. Goldman is still cutting, but not exactly wholeheartedly.
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It’s not clear where the job cuts happened, but today’s results suggest Goldman’s ill-fated platform services division, which made a $147m loss, should be the prime candidate for ongoing headcount reductions. In global banking and markets, by comparison, net earnings rose 18% year-on-year.
Within global banking and markets, performance was mixed in Q2. As the chart below shows, Goldman Sachs’ M&A bankers, debt capital markets bankers, and equities salespeople and traders underperformed rivals at JPMorgan and Citi in terms of revenue growth in the second quarter. The firm’s equity capital markets bankers outperformed Citi’s but underperformed JPMorgan’s. Goldman’s fixed income currencies and commodities (FICC) traders outperformed both rivals.
Within FICC, some teams performed better than others. Goldman said today that revenues in macro products and mortgage trading were significantly higher, while revenues from credit products were significantly lower in Q2. At Citi, by comparison, macro trading revenues fell 11% in the second quarter, while credit trading revenues were up 20%.
Although Goldman isn’t hiring as revenues and profits rise, it is preparing to reward the staff it’s already got. Money set aside to compensate staff rose 14% year-on-year in the first six months of 2024, despite the reduction in headcount. As a result, average pay per head increased from $173k in the first six months of 2023 to $199k in the first six months of 2023.
Within the investment banking and markets business, Goldman’s financing operation is doing particularly well. The firm said today that it earned the second-highest quarterly revenues ever in equities financing and that fixed income financing revenues were up 34% in the first six months. Equities financing includes prime broking; FICC financing includes secured lending by the securitization team, securities lending, and commodities financing.
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