Hi. I'm Aaron Weinman. Some — perhaps uncaffeinated? — Goldman Sachs bankers were taken aback by the New York Times' report that said the Wall Street bank is preparing to conduct a sizable round of job cuts.
"Not a great thing to hear from the Times," one banker told me, adding that it was surprising to learn of the bank's plans from the press first. "My team seems relatively shielded from the cuts, but will be interested to see what happens elsewhere in the bank."
One possible area that is ripe for cuts is the investment bank. Goldman — alongside most of Wall Street — has been stung by a slump in dealmaking activity across the capital markets as companies adjust to an economic slowdown and rising interest rates.
The upcoming cuts reflect Goldman reintroducing its annual Strategic Resource Assessment initiative. The SRA typically terminates 1%-5% of underperforming staff.
For more on Goldman's extensive performance review process, check out this story from Insider's Reed Alexander. And for Insider's latest on the potential cuts, check out this report.
Let's dive in.
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1. Goldman Sachs bankers are bracing for a heavy round of job cuts this month. The cuts are part of Goldman's annual SRA, an initiative the bank paused during the earlier years of the pandemic when dealmaking blossomed.
The SRA complements other initiatives, like slowing hiring and lowering compensation packages – moves designed to mitigate the impacts of less dealmaking, and weakened revenues.
Given it is the first time since the onset of the pandemic that Goldman is applying its SRA, the job cuts could prove the most significant for a Wall Street firm since 2020. It may mean the elimination of "several hundred roles" this month, Bloomberg reported.
And Goldman is not alone on Wall Street in undertaking cost-cutting measures.
In June, JPMorgan was poised to cut over 1,000 workers from its home-lending unit, and Morgan Stanley cut pay packages in its investment bank by 21% in the second quarter. Asset manager BlackRock also told staff in July that it was pulling back on some hiring.
An economic slowdown and general uncertainty among dealmakers underscores that the record-breaking 2021 is well and truly in the rear-view mirror.
In other news:
2. A Gibson Dunn summer associate used social media to land a mentor at the law firm. Here is a step-by-step guide to getting into a top law school and scoring an elite first job.
3. JPMorgan has agreed to buy Renovite, a payments startup that will help the bank compete against Stripe and Block, CNBC reported. For more on JPMorgan's quest to disrupt the disruptive fintech space, here is a rundown of 15 deals and investments it has made.
4. Fidelity Investments is weighing a plan to allow individual investors to trade bitcoin on its brokerage platform, the Wall Street Journal reported. Fidelity launched a bitcoin-trading business for hedge funds and other institutional investors in 2018, and earlier this year, allowed corporate clients to add the digital asset to 401(k) retirement plans.
5. Goldman Sachs' Apple Card business has a surprising subprime problem. Goldman's loss rate on credit-card loans is the worst among big US card issuers, and "well above subprime lenders," according to a note from JPMorgan.
6. Elon Musk has dreamed up a new way to get out of the $44 billion deal for Twitter. A $7.75 million payment to Peiter "Mudge" Zatko is a new breach of the agreement, according to a letter from Musk's legal counsel.
7. Credit Suisse's board members have floated the idea of giving its senior dealmakers an ownership stake in the unit, Bloomberg reported. The plan aims to retain top talent and also keep a lid on costs.
8. Silicon Valley's well-known startup accelerator, Y Combinator, is reviewing over 20,000 startups for next winter. Here is what the firm's head of admissions is looking for.
9. Remote work is killing Florida's reputation as a retirement paradise. Rising home prices are threatening America's retirement dream.
10. Parafin, a fintech focused on companies like DoorDash and Mindbody, just raised $60 million. Here is a look at the 18-page pitch deck that Parafin used to raise the capital.
People moves:
- MUFG has hired two bankers from Wells Fargo to work in its restaurant-financing team. The Japanese bank hired Tracy Vasquez to lead loan underwriting and portfolio management of hotel-franchisee clients, and Steven Getty has joined to work on business development within hospitality.
- Bank of America has named Mike Joo the North America head of its global corporate and investment-banking (GCIB) group, Bloomberg reported. Joo will take on the newly created role in addition to his responsibilities as chief operating officer of the GCIB group. He joined BofA in 2006.
Curated by Aaron Weinman in New York. Tips? Email aweinman@insider.com or tweet @aaronw11. Edited by Hallam Bullock (tweet @hallam_bullock) in London.