Goldman Sachs Said to Cut More Than 20 in Sales, Trading

pdub wrote:

http://www.bloomberg.com/news/2012-08-15/goldman-sachs-said-to-cut-more-...

Great…more experience to flood the contracting market…

If I had that experience I would go to a HF or setup my own shop. I think it would be a waste to bounce from bank to bank unless the money is right. 

Yeah, I was thinking that too.

Yes, but if each of these twenty people decides to start up their own fund, and they need to hire some analysts to help them, say 2 each.  That would suggest that 20 people leaving Goldman turned into 40 more analyst jobs out there.

After news of Citibank laying off 4500, JP Morgan laying off 1000, Bank of America laying off 30,000, etc..  Another 20 peple from Goldman’s trading desk is just a drop in the bucket. 

I agree, but I do think it is a lot easier to raise money or get meetings, etc. if you say “I have X>5 years of experience trading at Goldman.”

My main points are 

1) 20 more people isn’t more than rounding error, compared to previous layoffs.

2) These particular guys might well be a source of new jobs, at least for the kind of jobs that people on this forum might want.

And these points are not predictions, they’re just trying to douse some of the cynicism that masquerades as critical thinking here.

Ok I agree that the 20 people is not really a big deal in isolation, although it is a bit depressing when viewed with layoffs from all these other firms. I guess what I’m trying to say (in response to bpulog) is that starting a hedge fund is not really a viable option for most laid off finance people. You need to be quite a senior person to have enough influence to attract $100 million in investments, or whatever you need to start a fund. The normal 5-year GS VP/director guy has little chance to do this in today’s environment. Instead of being job creators, they are more likely to struggle for a year or so before accepting a somewhat less desirable job in finance. Or if they are already wealthy, like with $20 million or so in assets, they might just move somewhere cheap and retire. 

I agree that further layoffs for support staff are possible. However, it’s more likely that the support staff have already been downsized. The axe tends to fall on these guys before the front office guys. 

Ah, so that’s what you meant by “flood,” my mistake.

Not necessarily. For instance, everyone who ran a prop desk at big banks was basically fired. Their businesses shut down; it’s not that they necessarily underperformed. These guys are the most qualified to run hedge funds, in fact. Not sure what is the case with these 20 GS guys, of course. 

Depends what division you’re talking about, but I can tell you qualified sales people are in short supply.  

CFAvsMBA wrote:

The 20 that were let go were the bottom of the barrel.  I wouldn’t sweat it.  Stop dwelling on these headlins and throwing yourself in an “oh sht” mindset.  It’s just going to harm you.  Work hard, do you best, and things will work out.  Worrying about all this noise never made anyone successful.

Word, f*ck fear.

ohai wrote:

Ok I agree that the 20 people is not really a big deal in isolation, although it is a bit depressing when viewed with layoffs from all these other firms. I guess what I’m trying to say (in response to bpulog) is that starting a hedge fund is not really a viable option for most laid off finance people. You need to be quite a senior person to have enough influence to attract $100 million in investments, or whatever you need to start a fund. The normal 5-year GS VP/director guy has little chance to do this in today’s environment. Instead of being job creators, they are more likely to struggle for a year or so before accepting a somewhat less desirable job in finance. Or if they are already wealthy, like with $20 million or so in assets, they might just move somewhere cheap and retire. 

I agree that further layoffs for support staff are possible. However, it’s more likely that the support staff have already been downsized. The axe tends to fall on these guys before the front office guys. 

I agree with this. It is extremely difficult to get money unless you have a successful long-term track record and a well developed infrastructure. The institutional funds market has become very well defined and extremely competitive – it’s not like it was in the ’90s for start up hedge fund. The best way to start a hedge fund is to either already be wealthy or to know wealthy people (likely other fund managers) and get seed capital that way. If you happen to know Julian Robertson, that would be a good start. But basically, starting a hedge fund today is more difficult than at almost any point in history, and it’s unlikely to get much easier any time soon (at least until the economy improves and people want to start investing again).