Okay, let's get to our next guest, and we're looking into Goldman Sacks as it prepares for its biggest random layoffs since the start of the pandemic. Discuss all this is Sally Bakewell Bloom Big US finance team leader, Sally, thank you some of joining us that that is this really reflective of the wider industry and in banking and investment banking or is it company specific? I think it
is a little bit reflective. So before the pandemic UM, a lot of banks typically did have this kind of annual cull when they would usually get rid of something in the region of two to five percent of their bottom performers UM. Now, because of the pandemic, they put that on hold UM and gradually have started to do it again. And now we understand we learned that Goldman Sachs is planning to to let go of about several
hundred of its staff UM starting from this month. And we can expect you know that the other investment banks they faced similar to challenges they're battling inflation UM. They have also seen a slump in dealmaking in investment banking. And we understand that a lot of the cut cuts with Goldman Sex were in that division, and so we can expect that this sets the tone a little bit for broader Wall Street and that we we might start
to see other banks following suit. No doubt though, there's a lot of pressure to raise the salaries of key performers, big producers. So are we hearing much about the overall strategies that to sort of hold the line, because you know, if you're letting three people go and then you're hiring somewhere else and also raising salaries, you might just tew
the line. Yeah, that's right, And in fact we we sort of have that dilemma played out in the comments from the HSBC CFO today where they say they will probably have to you know, materially raise pay for their employees next year UM and that in order to kind of battle inflation, which for a bank with two hundred and twenty people, it's one of its um you know, it has very very significant UM inflation related issues. It
may have to some undertake some pretty brutal cuts. I mean, I think that any you think about that two thousand, if you look at the number of people that work, for instance, say at PayPal, you know you wonder whether HSBC over the next many many years will cut headcount
just because it has to. Well, I mean, we're probably not quite seeing the magnitude that we've seen in this sort of tech space yet where you know, um, a lot of the company is not speaking of papal here, but they've faced, you know, a sort of crisis of investment confidence, and so they've had to and they're facing all kinds of challenges and they they've had to make these huge sweeping cuts. UM. I don't think we're we're going to see that with the US investment banks yet.
I think there, if anything, they'll probably be a bit more targeted in some of their teams. Goldman, you know, we perhaps could have expected a few more to be cut. They telegraphed in July that they were slowing their hiring velocity amid a challenging operating environment. So this number several hundred doesn't feel like such a significant number. Of course, it may transpire to be to be more um. But you know, the banks, they are facing this sort of
inflation re challenge. We've already seen them start to trim um a lot of their mortgage related bankers um and so we can definitely expect to see more. However, I mean that said you know, Citi CEO Jane Fraser, she did rule out investment banking cuts UM and you know, so it might not be that we see these huge swathes and a bit more kind of trimming around the edges in places, Sally. The thing is that the banking
has changed. It has a lot more competition from the new economy now than it used to, and that has of course changed the landscape because in the old days the banks used to routinely over fire, then over higher and just carry on with that sort of that vicious circle, if you will, right, And it's kind of interesting now. I mean just looking at JP Morgan UM for example, it's just purchased a company, a kind of fintech payments firm, renovatee.
Uh so, you know, in its quest to try and compete with technology in you know, in the new economy online banking with apps UM with sort of the payment apps that enable you to do these very quick transfers UM. So it will of course probably be acquiring people in that move UM and Goldman Sex. You know, while um it it's headcount is about forty seven thousand UM two years ago it was a little bit less than that, so it's actually been adding people UM as they have
also been quite aquisitive to UM. So yeah, the banking landscape now is of course very different, and they're trying to compete with sort of the fintech space, but that involves acquisition, which Bruce Head count UM just as much. I was a little surprised to see the stark price performance of hs spec actually up two point one in London and uh, well it didn't trade yesterday because har
Kom Marca was closed. But with those comments by by you and Stevenson and and nol Quinn about being being short on their cost cuts by half a billion, that's
a lot of money. Yeah, and I think they also said that they planned to hit their two percent cost target UM and so with costs in focus so much, I think if that's what they're telegraphing, that's probably why the UM share price didn't, you know, didn't take a massive massive hit and actually ticked up a little bit UM And you know, if this is their way to try and you know, I maybe investors are glad to see that the bank is going to really keep a lit on costs because that's the thing that they do
care about a lot. You know, JP Morgan for all of its positive results, it took black and shareholders for not keeping it on expenses. Yeah, excellent stuff, Sally, Thank you. Sally Bakewell, Bloomberg US Finance team leader with US live here