You might have heard that the safest bet in the industry is if you work in well-established companies. This is because you are guaranteed to get a salary every month while the same cannot be guaranteed in startups. Apart from that, there is also a notion that multi-national companies also have the latest pay to offer to you. However, this latest report involving Goldman Sachs is something that will change your notion on that matter. Because CNBC reports that Goldman Sachs is cutting the employee pay in order for them to invest in new ventures such as Apple Card.
As per the report, Goldman Sachs will pay the lowest to its employees in a decade and the executives have warned that this trend will continue. Because of the fact that software is now consuming more of the firm’s business. Goldman Sachs reportedly set aside just 35% of its revenue for the employee pays which is the lowest it has kept since 2009. CNBC’s report says that its employees ‘earned $246,216 for the first nine months of 2019, less than half the $527,192 at the same point in 2009’. This is an example by them to show how the bank has cut their employee pays.
A veteran bank analyst at Wells Fargo said that “We are in the midst of the biggest marriage of tech and finance in history,” and added that “It means more bots relative to bankers, more machines, more automation, more scale. The next decade will see the implementation of technology to a greater extent and in ways that have never been done before.”
Goldman Sachs CFO Stephen Scherr told analysts: “As we grow more platform-driven businesses, we expect compensation to decline as a proportion of total operating expenses,” and added the “Platform businesses should carry higher marginal margins at scale and be less reliant on compensation.”