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Why I Am Leaving Goldman Sachs

• adaml_623 15y ago
  There are a few lessons in there for a few tech companies as well I think. If your customers don't trust you then they will leave. OR not begin using you in the first place. However big you are supporting your customers and being contactable when there are problems is an essential cost of business.
• rdl 15y ago
  I know a lot of people who have left Goldman, etc. in the past few months, specifically for tech jobs. It's because 2011 bonuses were utter crap. (and it is toxic I'm sure, but the $ was the main thing)
  • bru 15y ago
    If I may ask >specifically for tech jobs Which kind of tech jobs? For banks, or something unrelated?
    • rdl 15y ago
      Startups (widely varied) or grad school. These were tech people who worked in various tech/quant roles. I think sample size is 4 at GS, maybe 10 elsewhere.
      • rdl 15y ago
        Also several have said they'd apply to YC (they have money, but not startup industry connections, or at least not current ones). Remember, the deadline is March 28th... I'm pretty sure that after working for Goldman, you don't go work for another large bank, you go work for the Goldman of another field. Otherwise it would be like going from MLB to a farm team -- not an upward move.
    • ebaysucks 15y ago
      Rocket Internet has been hiring several Goldman bankers lately to be local or functional managing directors for their startups.
    • jabberwock13 15y ago
      I left Goldman Sachs for Facebook - a few left for Google, and of course startups, etc.
• suprememoocow 15y ago
  Many of the sentiments expressed by the author are shared by developers and other technical staff working in the finance industry. In places like London and New York, finance has, for a long time, managed to get the best technical staff by paying the highest wages even if the work is less interesting. This has been detrimental to other industries in the same regions. As morale declines in finance firms, however, this is changing.
  • ig1 15y ago
    For a long time finance has been the place where the most interesting tech was going on (not to say there isn't a lot of boring bog standard stuff as well). It's an industry where many firms have had to develop their own network transport layers, database engines, languages, etc. Where machine learning and big data have been standard practice for over a decade. Where understanding complexity and concurrency theory are important, and designing lock-free algorithms can be a daily activity. There's very few areas of core CS that aren't used in investment banks.
    • svanderwaal 15y ago
      I'm wondering if any of that work has been made available, eg. as an open source project? There's a standard practice among tech/web companies to share innovation on the infrastructural level, but I cannot name one example of a bank innovating openly in that way. Perhaps they do publish academic papers about their innovations?
      • VaibhavZ 15y ago
        Im not sure about publishing of papers on innovations but there is constant work going on to improve the database systems and few people I know have come up with software programs to check the bankruptcy!
      • suprememoocow 15y ago
        I've been contracting in the finance industry in London for seven years (at four firms) and although financial companies are some of the biggest users of open-source software, it's almost unheard of for firms to contribute back to open-source projects. There are a few progressive companies but unfortunately I've not worked at any of them. Many firms have a strict policy of disallowing any source (open or not) from leaving company premises. Email servers and proxy filters have detectors that will raise an alert if source code is emailed or sent out over HTTP. It's easily a sackable offence and this discourages developers from contributing changes back to open-source: there are simply too many hurdles to jump through in order to do it.
• spdub 15y ago
  I see more and more of these exodus posts from various companies. The one static thing I seem to be able to pinpoint between them, is that as companies grow larger - more management is needed. As the management grows in a company the modus operandi shifts from product to bottom line. While interesting, it seems that this is just inevitable with most companies growth.
  • einhverfr 15y ago
    The interesting question is how much management one could get away with trimming.....
• einhverfr 15y ago
  I keep thinking about this article and the recent Google one as well. And I wonder, is this sort of moral decay necessarily part of the current corporate world? Is it possible, over the long run, to have a tech firm, or any other firm, that empowers employees to do what is best for everyone and to hell with the rules? Or is this merely a matter of a few good leaders who get it, and everyone else eventually overcoming them? When I worked at Microsoft in Product Support Services, our general director "got it" and encouraged us to break any rule if it helped the customer out, so long as we did so reasonably responsibly, something I took him up on to the point it seriously annoyed my direct manager. He left, and the group I worked with ended up getting shipped off to India. And given more recent discussions with Microsoft customer service, the question of "how do we deliver quality customer service" has become far less important. I guess my musings lead me to the thinking that being good requires a level of confidence that is easy to lose as an organization, and that as it is lost, the organization can turn toxic fast. But we can't succeed all the time. We will face huge challenges. So how do we resist the urge to turn and focus only on the immediate challenge, whether a competitor or the bottom line?
  • nostrademons 15y ago
    Currently work at Google, obviously speaking for myself and not my employer. In my experience - yes, this moral decay is a necessary part of the current corporate world. Or any corporate world. Or really, any world without the possibility of failure baked into it. I've seen a lot of idiotic decisions made at Google, many of which have been complained about on Hacker News, many more of which are hidden causes of things that are complained about on Hacker News. In every case, when I looked at the chain of decisions that led to things being the way they are, every single decision was rational, given the information that all participants had at the time. There's no vast conspiracy dedicated to turning Google evil, no influx of incompetent new PMs & designers. Some of the most questionable decisions have come straight from old timers like Marissa, or even from Larry Page. Instead, it's an information problem. Running any enterprise the size of Google or Goldman Sachs requires trading off many competing factors. To make the tradeoff, someone has to keep all that information in their head at once. There's no other way to balance competing demands; if you keep only part of the information in your head, your decision will be biased towards the part that you've loaded into your brain. If you try to spread decision making across multiple people, the decisions will be biased towards the part that the person who screams the loudest can hold in his head (which is usually a smaller subset than optimal; it takes mental effort to scream loudly). I often see mystified posters on HN wondering why Google did something or other, and a good amount of the time, I know (but can't say) exactly why we did it. The userbase does not have all the information. Unfortunately, they don't care that they don't have all the information; they want Google to work as expected, and the fact that there may be internal systems that don't quite behave according to their mental model is irrelevant. And so the fact that decision makers make decisions based on information that users can't have becomes a liability in this case, biasing them away from what's "good" for the user. I remember Paul Buchheit writing here, several years ago, "A system's participants don't have to be rational for the system itself to be rational", referring to market economies. I'd posit that the inverse also holds: a system with completely rational participants can still be irrational, if information flow between participants is not organized in a rational way.
• qasar 15y ago
  One hypothesis could be that all organizations go through waves of growth and success which then impact the subsequent talent they attract. In other words, the most recent wave of talent that Greg Smith talks about is more interested in being associated with the Goldman brand, rather than the genuinely possessing the underlying desire to be world class bankers. Also, perhaps this happened years ago and now its too late because those B players are now running the show.
• kqr2 15y ago
  Somewhat ironically, Goldman Sachs primary business principle / mission statement is: Our Clients' Interests Always Come First http://www.goldmansachs.com/who-we-are/business-standards/business-principles/index.html http://www.goldmansachs.com/who-we-are/business-standards/bu...
  • revorad 15y ago
    Interest is the key word there.
  • sumukh1 15y ago
    But if you lift the curtain behind that statement, what they really care about is their own success. >"... if we serve our clients well, our own success will follow." Then a few lines below, they essentially define what success looks like for them and say that profitability critical to achieve those goals. It seems like that profits are a more direct way to achieve "success" for them. > "Profitability is critical to achieving superior returns, building our capital, and attracting and keeping our best people" This should serve as a reminder that you can talk, talk, and talk some more, but ultimately, you need to "walk the walk" for your words to carry a significant impact.
• Hontano 15y ago
  Way to leave in style, good for him. I hope it gives the firm the wake up call it needs. I left a couple of years ago after a three year stint. It was partly out of the boredom of babysitting a legacy platform that had little future, but mostly because the department's role devolved into getting away with doing the minimum for clients to justify our fees. No matter how well GS pays, despite the relatively poor bonuses, it's not going to be possible to attract and retain the kind of staff they need. I wonder how many other nerds sit at their desks and catch a minute's respite by daydreaming of building something great? If they're lucky enough to have the freedom and enough of a financial cushion to take the leap I highly recommend it. I've not been happier since.
• guelo 15y ago
  So he thinks Goldman was honorable back when he was young and had no idea what was going on. Bullshit. I happen to know of some shady Goldman credit swaps from the 90s that my municipality has been trying to get out of. I'm sure there is plenty of other garbage that went on back then too. You don't hire a bunch of mostly young male type-A personalities and wave million dollar bonuses in their faces and not expect questionable deals.
  • JumpCrisscross 15y ago
    >mostly young male type-A personalities...wave million dollar bonuses in their face This also characterises hackers and Silicon Valley. There are some really good people on Wall Street just as there are some real turds in Silicon Valley. If you go back into Goldman Sachs's history it was a venerable firm with a storied past of forsaking short-term profit for the client, i.e. being long-term greedy instead of short-term greedy (quoting a GS executive from the 1970s). It started changing in the 1980s and completed its transformation after its IPO. Values aren't a function of sex or ambition.
    • deleted 15y ago
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    • dustineichler 15y ago
      "there are some real turds in Silicon Valley", understatement of the year. Gimme some time, I'll eventually rant about this on my way out the door too.
    • deleted 15y ago
      [deleted]
  • gebe 15y ago
    I found this a bit strange as well and initially thought the article to be some kind of a spoof. I don't know a thing about investment banking but I have never, ever in my life read anything positive about the prevalent cultures at these firms.
• JumpCrisscross 15y ago
  I was an esoteric derivatives trader at an investment bank making money off clueless clients. We actualy prided ourselves, as a prop desk, on not being client facing. I went in expecting to parse global markets for inefficiency while pioneering the frontiers of 21st century finance. As time went on I found that the firm was content with mediocrity (as it could survive by simply existing in its role) and had no time for risky business like thinking. You delude yourself into thinking you're inherently superior, a "Master of the Universe", even as you have never been able to explain to your mother what you do. Sooner or later you realise your colleagues are smart but terrifically insecure human beings, valuing their roles for who association with the firm's name makes them rather than what they actually do. Thus hierarchy is strictly enforced and innovation rages furiously in quaint, safe areas, e.g. introducing "new" leveraged/inverse hedged swaps, while ignoring fundamental assumptions, e.g. the trading floor should be siloed by product. The bureaucracy and technical debt, combined with constant turnover in the under-paid operations and IT staff, mean that gaining understanding of the firm's as a whole as of no less than a quarter ago is a Herculean undertaking. And it's worse when you talk about the sales traders - none of them understand their product (they don't need to - the client's the one taking the risk), it's a miracle if they know a few shortcuts in Excel, and every one of them has an opinion on how xyz company (or country) should re-structure without having read a single term sheet or prospectus. Luckily, there are start-ups that are raging equally furiously but with un-paralleled agility towards the financial sector. Alas, we'll have to find a new slot-in role a la consulting, investment banking, and sales & trading for insecure college graduates without hard skill sets to plump. Note on recruiting I've seen some comments tacitly saying Messr Smith should have known what he was getting into when he signed up for the job. I was recruited by a very charismatic and values-driven MD when I was 19. Our desk merged with the rest of the firm's shitty culture when he was fired for being too ambitious. I didn't join for the six-figure salary - I turned down other offers that paid more at the time. There are lots of other people I know, brighter than I am, who were similarly drawn to the thought of a dynamic work-day filled with brilliant, ambitious people all working to solve difficult problems (that could be a tech company's recruiting ad...). Maybe I should have been more clairvoyant, but in the end what drives people to finance and what drives people to tech isn't all that dissimilar - the unique cultures change like to unlike from there.
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• lkozma 15y ago
  It's probably all true, but the piece reads like an extended resume. If only I could get NY Times to let me rant about how ethical I am and what trillion-dollar clients I advised.
  • solutionyogi 15y ago
    I agree with you but if you are at his level, you don't really need a resume anymore. Financial industry is all about who you know and from what I can see, he is very well connected.
    • seertaak 15y ago
      FYI Executive Director at GS means the same thing as VP, which sounds much more impressive than it actually is. There are literally thousands of them. To put it another way, ED is a level up from Analyst. The real cheese begins at Managing Director -- which is the first level you don't reach through seniority, but through "skill" (or politicking!).
      • lusr 15y ago
        "Greg Smith is resigning today as a Goldman Sachs executive director and head of the firm’s United States equity derivatives business in Europe, the Middle East and Africa." I could be wrong, but I don't think the number of positions heading business units across continents is that large.
        • gaius 15y ago
          There are an awful lot of Head Of X positions too. Often these have no-one reporting to them directly - they are more analogous to project managers.
      • egwor 15y ago
        No, Associate is a level up from Analyst. Executive Director == EMEA version of VP. There are a few thousand of Vp's but there are also what, 25K staff.
• deleted 15y ago
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• gavanwoolery 15y ago
  I have ranted for a long time about the corruption at Goldman Sachs, mostly to deaf ears. :) This is the tip of the iceberg, as far as I am concerned. My bigger concern is how involved GS is with our government. http://www.nytimes.com/2008/10/19/business/19gold.html?pagewanted=all http://www.nytimes.com/2008/10/19/business/19gold.html?pagew... As it turns out, the human race is extremely intelligent and wherever there is an opportunity to make money (corrupt or not), people are probably doing it. I would call it a conspiracy theory, if it were not occurring in plain site. Exactly which Americans approved of the multibillion dollar bailout, show of hands?
  • gavanwoolery 15y ago
    Sigh. Learn reddiquette people - downvoting is for irrelevant comments - not necessarily comments that you just disagree with. http://www.reddit.com/help/reddiquette http://www.reddit.com/help/reddiquette If you disagree with me, that is cool - just leave a comment telling me why. If you think my comment is irrelevant for some reason, also let me know why. Edit: More appropriately -- http://ycombinator.com/newsguidelines.html http://ycombinator.com/newsguidelines.html
    • panacea 15y ago
      Didn't mod you, but I think you're looking for this: http://ycombinator.com/newsguidelines.html http://ycombinator.com/newsguidelines.html
      • gavanwoolery 15y ago
        Thanks, that is more relevant :)
  • jpdoctor 15y ago
    > My bigger concern is how involved GS is with our government. I agree: This deserves a great deal more attention. Hell, just the Henry Paulson tax giveaway should have caused civil unrest.
• thongly 15y ago
  GS secret sauce: "teamwork, integrity, a spirit of humility, and always doing right by our clients"
  • gaius 15y ago
    GS should never have IPO'd. It never belonged to the partners, they were only custodians of it. Then it became just another bank.
  • deleted 15y ago
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  • jpdoctor 15y ago
    > always doing right by our clients ... and interestingly, not "for" our clients.
• panacea 15y ago
  "Why I left reddit" 'It changed man. The culture wasn't the same as when I joined five years ago.' These 'I said GOODBYE SIR!'s are interesting, but I'm not sure how much reliable information can be gleaned from them. What ever happened to not 'burning your bridges'? This is a resumé.
  • zerostar07 15y ago
    I agree with your sentiment, but not with the "burning your bridges" part. Seems like the fear of burning your bridges keeps many people from speaking frankly about what's happening in the corporate world. And that's important nowadays because as they say, politicians don't run the world, Goldman Sachs does. Looking forward to wikileaks bank-leaks.
    • Estragon 15y ago
      Yes, given the cynicism which seems to have developed there, it seems like only a matter of time before some GS employee decides to leak embarrassing information as part of an insider trading scheme.
  • deleted 15y ago
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  • kokey 15y ago
    It's good to take them with a pinch of salt, just as you take what your girlfriend say about her ex with a pinch of salt. That said, after the salt has been applied you are still left with some useful information.
• michaelochurch 15y ago
  The gentleman era of investment banking is largely mythical. There was a long period where they were notably less scummy and cutthroat than other investment banks (compare: Salomon Brothers in the 1980s) but they were always an investment bank. The most visible (to a young person) sign of a bank's character is how it treats its employees. The 90+ hour weeks and terrible conditions in the "analyst" program (the term has nothing to do with analysis; it means "whale-shit") are not a new invention; that goes back to the 1980s. Before that, banking was dominated by the Mad Men culture: the hours weren't long but the politics was just as malicious.
  • JumpCrisscross 15y ago
    >The most visible (to a young person) sign of a bank's character is how it treats its employees Character in a limited sense, but I don't know how much that translates into client satisfaction. Foxconn, Apple, and Disneyland come to mind. As a trader I officially had a 50 hour week. I stayed for 70+ hours because I found the work I was doing, at least initially, interesting (I was generally the last trader on the desk to go home). Specifically regarding investment bankers, yes they work very long hours, but the analysts there generally see the time as financial boot camp. Besides, the staff senior to them are no less workaholic. Some start-ups have their employees working 90+ hours. This isn't because they're evil but because they have limited resources, a lot of work, and the people there are amazingly passionate about what they're doing.
    • michaelochurch 15y ago
      Some start-ups have their employees working 90+ hours. This isn't because they're evil but because they have limited resources, a lot of work, and the people there are amazingly passionate about what they're doing. Limited resources. That's why the long hours are not a sign of evil in startups but are one in banking. Banks could easily hire more people. Startups generally hire good people as soon as they can.
      • JumpCrisscross 15y ago
        Whether they could is debatable given that many of them are aggressively trying to raise capital, even if it means laying off workers to cut costs. But let's assume they can. That doesn't mean they should. Most bankers I knew were much more upset about losing their week-end beer fridge or a $5 reduction in their daily meal allowance than they were about putting in a few more hours. You have to remember that most analysts see their 2 years as an apprenticeship or finance boot camp - they want all the experience they can get so they have a gilded resume at the end of it. I still don't see a good argument for judging firms where highly compensated employees with plenty of options work long hours, particularly when, as in banking, their tangible skill-set is relatively low.
• lollancf37 15y ago
  When did common sense became so inspiring ?
• mathattack 15y ago
  The article still overflows with ego. From table tennis champion to Rhodes Scholar!
  • ahmadss 15y ago
    it's hard to sell common sense values and mores without dropping hints and lines about who you associate with and how awesome you are. in all seriousness though, he probably saw this as a golden moment to build his personal brand, gain some media exposure, and leverage that exposure and brand building into another job offer, a writing gig, or a TV gig. consider it a golden parachute moment.
    • mathattack 15y ago
      His Michael Lewis moment?
  • pnathan 15y ago
    Part of that is building creditability. If he had said nothing about himself, how should you believe him? But as the ancients implied, one who testifies of themself is not trustworthy. :-/
  • beachgeek 15y ago
    Don't forget the full scholarship to Stanford.
• steve8918 15y ago
  It's interesting how the tone of this article is almost exactly the same as the one about the Microsoft employee that recently quit Google. Something happens to companies as they get larger, where the culture of a company starts dying from a death-by-a-thousand-cuts, and then they start promoting the wrong people into upper management that seem to really poison a very good company culture. It sounds like Goldman Sachs is one of these companies. The irony is that I think the shift in mentality came from Wall Street itself pushing the idea of "maximizing shareholder value", in the 80s. This lead to a bunch of financially positive but culturally negative (some would say sociopathic) decisions, such as closing plants that were profitable, but weren't profitable enough. I think Michael Moore had a movie on this called "The Big One". Forbes has an article on this, calling it "The Dumbest Idea in the World": http://www.forbes.com/sites/stevedenning/2011/11/28/maximizing-shareholder-value-the-dumbest-idea-in-the-world/ http://www.forbes.com/sites/stevedenning/2011/11/28/maximizi... I read the biography on Goldman Sachs, and I don't doubt for one second that there was a historic culture that most of the employees were fiercely proud of. But as the author mentioned, a few mistaken promotions into power and the whole culture of a company can change through death by a thousand cuts. No doubt the same thing is happening at all large companies that started off with great roots. I saw this occur at Yahoo, where completely idiotic decisions were made in order to preserve revenues so that managers' bonuses were left in tact. Is this something that can be avoided? I'm not sure... corporate culture starts at the top and works its way down. It's something that must be demonstrated by the leaders of the company at every level, and it filters down to the lowest ranks. So if you have a company with strong leadership, then I think it can be staved off for a while, but it requires a relentless focus.
  • mmj48 15y ago
    I genuinely thought this piece was a satire of the ex-Google MSFTer.
  • chime 15y ago
    > Something happens to companies as they get larger... I think promotion happens. When you're a fresh grad right out-of-college and the Managing Director says "client is our #1 priority", you take it to heart. That's your new mantra now. Nine years later, when the same Director, now promoted to the Board says the same line, you groan inside because you know exactly how often he calls his clients muppets. Slowly you begin to feel that the company is no longer the same wonderful, inspirational place of work that you signed up for. Positions of power at any company, non-profit, government, or political organizations are not filled with do-gooders who want to give everyone a hug. They are filled with thick-skinned, ambitious, practical people who have learnt to say the right things at the right time. So if you're a junior exec., you will hear inspirational BS. As you join their ranks, you will hear their real thoughts. If the latter disgust you, it clearly means you aren't fit to join their ranks, not because of any lack of skills on your part but rather the difference in how you view the world. To me all these execs leaving companies and saying "it's so different now" just means they all grew up and realized they didn't like what they signed up for. It's no different than couples splitting because "we grew apart." I highly recommend people quitting if things aren't working out ( http://chir.ag/200804242130 http://chir.ag/200804242130 ) but I do not recommend airing out the dirty laundry, especially when no laws were broken because you're just scaring off the next company you intend to work for. None of my above comments were in reference to anything at GS/Google/MS specifically. Facebook will start charging for integration some day too and some Dropbox exec will joke in company meetings about all the stupid people who save personal photos on their servers. People are people and companies are companies.
• raheemm 15y ago
  This is indicative of the shift of power within GS from investment banking to the trading side of operations. That shift itself is based on who is generating the most profits. Seems that trading and investment banking maybe ideologically opposing forces, from a client interest standpoint. So to remove conflicts of interest they should divest of one or the other and decide who they want to be.
• ajb 15y ago
  So, Goldman used to be honest? They rated their own chapter in 'The Great Crash, 1929': http://storyoftheweek.loa.org/2010/10/in-goldman-sachs-we-trust.html http://storyoftheweek.loa.org/2010/10/in-goldman-sachs-we-tr...
  • byrneseyeview 15y ago
    To be fair, I think many of the people who were employed at Goldman Sachs three generations ago are no longer with the firm, so it's hard to judge GS based on that.
  • Estragon 15y ago
    Exactly what I came over here to say. If there's been a change, it has to be something like the cynicism at GS having grown so overt that they can't pay some of their institutional drones enough to ignore it.
• kds 15y ago
  I'd have appreciated such a step and public online announcement of its motivations if done before Christmas. Not after the bonus payment.
• ajhit406 15y ago
  I find it somewhat ironic that a 12-year finance veteran is preaching about integrity and resigning through an op-ed piece in the Times. While it feels good to recognize the eroding integrity of the industry (assuming it existed in the first place); I don't think this messenger is praiseworthy. Reeks of self-righteousness to me... and somehow I'm certain he'll be starting his own fund in the coming months.
• va_coder 15y ago
  I hear a lot of talk about how things have changed. Have you guys read Liars Poker? This stuff has been going on since the dawn of time.
  • jpdoctor 15y ago
    > Have you guys read Liars Poker Funny side note: Michael Lewis said that he wrote that as more of a warning. He was astounded (and a little horrified) to find out it was being used as a how-to.
• phillco 15y ago
  Although its veracity cannot be confirmed, I would highly recommend the "Goldman Sachs Elevator" twitter account for further reading... https://twitter.com/#!/GSElevator https://twitter.com/#!/GSElevator
  • redthrowaway 15y ago
    It's pure fiction, but highly entertaining.
    • jarek 15y ago
      Supposedly it's at least partially true (as in featuring real people really saying these things) but my source for this is this blogger that says so, so...
• byrneseyeview 15y ago
  Goldman has a kind of hilarious understated response, in which they note that this guy was a VP (there are thousands of VPs at Goldman) and that the group he managed consisted of him and him alone. Plus, this was a bad year for bonuses. Nothing like a slow career and a dwindling bank account to make you aware of how morally imperative it is that you switch careers! The people I know at Goldman are generally bright and hard-working. The ones who perform agency work seem to serve the interests of their clients; the ones who are closer to proprietary traders tend to advance the interests of Goldman. There are some products for which it's very hard to have a pure agency relationship, though; the best way to keep them liquid is to trade with someone who is taking the other side of your trade. I'd keep that kind of thing in mind when reading a story like this. It's asymmetric warfare: he has nothing to lose by talking about how bad Goldman is, but if Goldman talks back, they're a) dignifying a silly story, and b) creating an opportunity for irresponsible folk like Taibbi to willfully misinterpret them. This article is the table tennis bronze medal of moral outrage.
  • outside1234 15y ago
    i suspect that the real Goldman response was to make sure this guy is on every financial black list there is.
    • jarek 15y ago
      He got on the list the money he gave NYT the go-ahead to publish that article, and he knew he would perfectly well. Next week you'll hear about his new gig as an executive at a non-for-profit.
  • newstartupidea 15y ago
    Good points. Something else I kept in mind when reading was that Goldman has a responsibility to its employees and clients to be able to weather the future, and regardless of current market volatility, there is a large amount of uncertainty; that uncertainty is prime motivation for focusing on making money by any practical means. That said, these are not excuses for bad behavior, and even though Greg Smith has a good bit of motivation to spin all of this in a way that benefits him, he puts himself at risk by saying this.
• rtperson 15y ago
  I worked at Goldman briefly in the 90s, and I remember being pleasantly surprised at how little cynicism, and how much genuine enthusiasm for helping others I found there. It was a bank, sure, in the business of making money, but there was always this sense -- emanating from the top -- that money was not its sole purpose. I can see where this writer was coming from, and I agree with him that if this bank has lost its unique culture, then it has lost touch with what made it successful in the first place.
• ValG 15y ago
  This article reminds me of the girlfriend that puts up with all sorts of issues in a relationship but never addresses them. Then one day she snaps and leaves without warning, when all along the relationship may have been saved with some effort. I'm not saying he didn't try (his mentoring certainly suggests he did), but it's a shame such a (previously?) reputable firm has fallen so low. I'm not familiar with Goldman's hierarchy, but my impression would be that Greg is in a very senior position within the company. Greg sounds like he was in a direct position to influence the culture of the company and maybe turn it back into what he remembered from his past. As an executive director, I think that he almost has a duty to do just that. I'd be interested in Warren Buffet's take on Goldman's Culture, or was he one of the ones that got bilked (although it seems like his investment is doing well)?
• cs702 15y ago
  "Why I am leaving the Empire," by Darth Vader: http://www.thedailymash.co.uk/index.php?option=com_content&task=view&id=5007&Itemid=81 http://www.thedailymash.co.uk/index.php?option=com_content&#...
  • velshin 15y ago
    That's hysterically funny. Only slightly off topic.
• seshagiric 15y ago
  For some reason this sounded to me quite a much like James Whittaker's blog on why he left Google. http://blogs.msdn.com/b/jw_on_tech/archive/2012/03/13/why-i-left-google.aspx http://blogs.msdn.com/b/jw_on_tech/archive/2012/03/13/why-i-...
• uptown 15y ago
  Goldman's response: http://blogs.wsj.com/deals/2012/03/14/goldman-rejects-claims-made-by-disgruntled-executive/?mod=e2tw http://blogs.wsj.com/deals/2012/03/14/goldman-rejects-claims... “We disagree with the views expressed, which we don’t think reflect the way we run our business,” a Goldman spokeswoman said. “In our view, we will only be successful if our clients are successful. This fundamental truth lies at the heart of how we conduct ourselves.” Mr. Smith described himself as an executive director and head of Goldman’s U.S. equity derivatives business in Europe, the Middle East and Africa. A person familiar with the matter said Mr. Smith’s role is actually vice president, a relatively junior position held by thousands of Goldman employees around the world. And Mr. Smith is the only employee in the derivatives business that he heads, this person said.
  • egwor 15y ago
    If he really were head of US Equity Derivs (derivatives) Sales in EMEA, he'd be an MD (managing director). We can all be head of something... after you put enough creative thought in it.
  • adrianwaj 15y ago
    Alex Jones' response: http://youtu.be/YF4oS46gaxI http://youtu.be/YF4oS46gaxI "they're a bunch of guys going 'I'm only worth 10 million and the other guy's worth 40. Rip everybody off.' ..they're a bunch of scum."
• JerryF 15y ago
  The most amusing thing I find about Goldman Sachs, is their refusal to put their name on their building. They built a brand new 43 floor office building right across the street from Ground Zero to serve as their new headquarters, and their name is no where on the building. It makes one think that they are hiding -- perhaps they're ashamed of themselves?
  • T-hawk 15y ago
    That is normal for all sorts of financial organizations, to not put the name on an office building. If they do, they get customers wandering into the lobby thinking it's a retail branch looking for services. Bigger problem for banks, but investment firms get that too. I once worked for Citibank in an owned but unlabeled building. Basically it's the same reason that Wal-Mart doesn't put its name on a distribution warehouse facility. People would try to walk in thinking it's a store.
  • DanBC 15y ago
    Partly they're hiding from people with guns and bombs.
    • jarek 15y ago
      People don't really wander around downtown Manhattan with bombs or assault weapons. If they're looking to bomb GS, figuring out GS is at 200 West is unlikely to be the greatest of their challenges. (There's few ways it could be more public than being listed in their Wikipedia infobox.)
      • DanBC 15y ago
        I don't claim it makes any sense, but after 9/11 one of the things that JP Morgan did was remove their name from many of their buildings in the UK. I agree that most people don't have assault weapons or bombs. "Blogger Bob" shows what a few people take into airports (many training grenades, which look real to scanners and cause delay). It's surprising how many people try to take loaded handguns onto planes.
      • 15y ago
• dkrich 15y ago
  It would be awesome if he pulled a George Costanza and showed up to work next Monday and pretended that the op-ed piece was a joke.
  • dmg8 15y ago
    "Didn't you quit?" "What?! When?
• testinomy 15y ago
  The author must be really angry at Goldman. Didn't he get his 500k bonus, but only 200k? The other thing I learned is that corporations are out there to make a profit. Who would have thought? However, as an outsider, it's good to have some insight into the real business model of Goldman. It appears it partly relies on information asymmetry, i.e. ripping off clients without them knowing. This business model seems to have been damaged by this bad PR that aims to dissolve illusions of the clients. I hope this kids gets his bonus, but probably Goldman will just fire him after such a move. This is what happens when there are too many greedy hands wanting the honeypot, but one isn't satisfied. Not that unique to Goldman to be honest. When your business model relies on information asymmetry, whistle blowers can be a real pain. To combat that Goldman must discredit the source, and distract from the topic, which is what we saw here in their response.
• yumraj 15y ago
  Call me a cynic but a large percentage of people in I-Banks make their money and move on. Not that I doubt what he is saying, but it seems odd for people to just develop morality after 12 years at GS where he must have made his millions. Basically, IMHO, he has made his money, is burnt out and wants to do something else and thought it'd be a good idea to write this article since it perhaps increases his profile for he wants to do next.
• AznHisoka 15y ago
  What I don't get is.. if Goldman Sachs is 'ripping' people off, why do their clients continuously pay them money? I see a pattern among consumers. Lots of businesses give consumers what they want and tap into their emotional sensitivities, rather then what they need. Who's to blame? the business? or the consumer? the business is just seeing an opportunity for some profit. There's a misalignment in some industries between really serving the client, and making profits. Example: - Junk food companies and fast food: they give us what we want: great tasting good that makes us addicted, but is it what we need?
• gadders 15y ago
  Is there a subtext? The guy in the article has been at GS 10 years, heads up a desk, and is only an MD. Bank promotions are normally announced early in the year, and bonuses vest about now. I'm guessing he is pissed off he didn't get MD, and has waited for his bonus to hit his account before self-destructing. Stage 2 in his plan will be to push his ex-colleagues under the bus by writing an article about how evil bankers are, as per City Boy (http://en.wikipedia.org/wiki/Geraint_Anderson http://en.wikipedia.org/wiki/Geraint_Anderson)
• tomkarlo 15y ago
  I used to work for Lehman Brothers; since then I've worked for Amazon and Google in product capacities. (I was a PM before I went to MBA and then LB.) The biggest problem was that there's little incentive in financial products to pursue true creativity or innovation that generates value for your clients. Both the market and the regulatory climate make it very hard, and very risky, to develop and market new products. It's a lot easier to just find innovative ways to strip value from your clients, or make new securities look a lot like old securities. My role at Lehman involved helping issuers structure securities for various capital markets. I did not see us openly fleecing clients in the style of Enron or this Goldman article, but it was pretty clear that some kinds of deals were far more profitable for the firm than others, and it was going to be in your interest to promote those kinds of transaction. It's the people at the top who set the incentives and set the culture of a firm, and things will only generally get worse as they trickle down the structure to individual teams who are more interested in their personal comp than the overall corporate brand. One of the main reasons I wanted to go back to tech from finance was that I felt like there's at least a lot of tech companies (Amazon and Google included) where delivering true value to the end user is the primary value, and how you get promoted and paid. I did not feel that was the case on Wall Street; it was more important how many fees your team brought in than whether the issuers (clients) were still in business a year later.
  • rutipo 15y ago
    I used to work for Lehamn too, M&A. Now working on my own startup. I also found that the focus was on our incentives, and this is where the tech industry is different in that it sets the incentives aligned with the users. Wall Street could do the same by changing its incentives, and grow massively together with their clients. Once they understand that clients all the way to the end ("crowd") investor can also be happy users. One thing that bothered me about this article though, is that it just seemed like he had a personal reason to make his superiors look bad. After all, he built his entire career in Goldman, so why burn your bridges? Unless they are already burned and you are leaving with a blast anyway, and maybe you are trying to get back at someone.
    • tomkarlo 15y ago
• j2labs 15y ago
  Very clever move to let his clients know they should keep tabs on him. It advertises his integrity and informs people he's leaving.
  • vnorby 15y ago
    I thought the same thing, it's very obvious that he's starting either his own firm, or will land somewhere else, and this article is a public attempt to retain his clients and advertise to new ones.
    • ilkandi 15y ago
      Er, this is the age of technology. Why write a NYT article when you've already got a copy of the virtual rolodex at home?
      • j2labs 15y ago
        Because you want people outside your rolodex too. :)
• amolsarva 15y ago
  A note about McKinsey and consulting: Lots of discussions on "evil Goldman Sachs" or "the useless profession of finance" that I have seen also include the business of management consulting (McKinsey, Bain, BCG, etc) as the similar career tracks. It is true that lots of elite students at US colleges are interested in Banking and Consulting when they graduate. They are interested because both careers are prestigious and lead to more things. But the comparison is very limited. There is a passage at the end of his op-ed when he talks about his first days in the values driven organization learning the ropes of what the work is, how to be productive at it, and how to take the client perspective always. I worked for McKinsey from 2003-2006 and I had that same first-day experience and it was more or less my experience throughout. I talk to folks now and they still think/act this way -- values are super important, the client comes first, being smart is all about helping the client better and therefore the firm prospering in the long run. People bragged about "we turned down the work" ALL THE TIME because it isn't a good use of "the client's money/time/focus". There have indeed been scandals where individuals (even the ex-head of the firm!) have done unethical things at McKinsey. These are more famous because McKinsey is so super duper integrity focused and they are embarrassing, but they happen on a backdrop of client service. And indeed many many public spirited, "business isn't really what I'm about" people come work at McKinsey and leave and go on to do other things. The big thing about consulting firms like McK which is really great and different from banking -- apart from the values which may be good for their business -- is that they are places for GENERALISTS. You get there and work on a wide range of problems, with a wide range of analytics/collaborative/communication skills. This is what is great about consulting and why people go on from there to do great things. In the "old" world of Goldman Sachs this might have been true too -- when they were investment bankers advising clients on what to do. You and client win in this scenario. But much of the firm's money these days is made from TRADING, where there is a loser on the other side -- apparently the client.
• toddnessa 15y ago
  I came away with a couple of things after reading this article. One was that it was nice to know that there are principled people out there on Wall Street who are willing to place their conscience ahead of their own interests and be willing to resign if necessary in order to protest a corporate culture willing to mistreat their customers for the sake of a dollar (as did Mr. Smith). The second is that the real way to create long-term wealth for any business is by exercising the time-tested principles such as the one mentioned in the article- integrity, a spirit of humility, teamwork and always doing right by your clients.
• amolsarva 15y ago
  The official response: We wanted to share with you the below communication which was today sent to the people of Goldman Sachs: Goldman Sachs Logo Office of the Chairman March 14, 2012 Our Response to Today’s New York Times Op-Ed By now, many of you have read the submission in today’s New York Times by a former employee of the firm. Needless to say, we were disappointed to read the assertions made by this individual that do not reflect our values, our culture and how the vast majority of people at Goldman Sachs think about the firm and the work it does on behalf of our clients. In a company of our size, it is not shocking that some people could feel disgruntled. But that does not and should not represent our firm of more than 30,000 people. Everyone is entitled to his or her opinion. But, it is unfortunate that an individual opinion about Goldman Sachs is amplified in a newspaper and speaks louder than the regular, detailed and intensive feedback you have provided the firm and independent, public surveys of workplace environments. While I expect you find the words you read today foreign from your own day-to-day experiences, we wanted to remind you what we, as a firm – individually and collectively – think about Goldman Sachs and our client-driven culture. First, 85 percent of the firm responded to our recent People Survey, which provides the most detailed and comprehensive review to determine how our people feel about Goldman Sachs and the work they do. And, what do our people think about how we interact with our clients? Across the firm at all levels, 89 percent of you said that the firm provides exceptional service to them. For the group of nearly 12,000 vice presidents, of which the author of today’s commentary was, that number was similarly high. Anyone who feels otherwise has available to him or her a mechanism for anonymously expressing their concerns. We are not aware that the writer of the opinion piece expressed misgivings through this avenue, however, if an individual expresses issues, we examine them carefully and we will be doing so in this case. Our firm has had its share of challenges during and after the financial crisis, but your pride in Goldman Sachs is clear. You’ve not only told us, you have told external surveys. Just two weeks ago, Goldman Sachs was named one of the best places to work in the United Kingdom, where this employee resides. The firm was the highest placed financial services company for the third consecutive year and was the only one in its peer group to make the top 25. We are far from perfect, but where the firm has seen a problem, we’ve responded to it seriously and substantively. And we have demonstrated that fact. It is unfortunate that all of you who worked so hard through a difficult environment over the last few years now have to respond to this. But, our response is best demonstrated in how we really work with and help our clients through our commitment to their long-term interests. That priority has distinguished us in the past, through the financial crisis and today. Thank you. Lloyd C. Blankfein Gary D. Cohn
• veguss 15y ago
  http://www.businessinsider.com/former-goldman-intern-this-is-what-it-was-like-working-under-greg-smith-2012-3?nr_email_referer=1&utm_source=Triggermail&utm_medium=email&utm_term=Business%20Insider%20Select&utm_campaign=BI%20Select%20Recurring%202012-03-14 http://www.businessinsider.com/former-goldman-intern-this-is... I hold him in very high regard - he took care of us junior guys, gave us great pieces of advice, and in general came across as one of the more personable, friendly, and genuine guys on the floor. Read more: http://www.businessinsider.com/former-goldman-intern-this-is-what-it-was-like-working-under-greg-smith-2012-3?nr_email_referer=1&utm_source=Triggermail&utm_medium=email&utm_term=Business%20Insider%20Select&utm_campaign=BI%20Select%20Recurring%202012-03-14#ixzz1p7rpY3Ae http://www.businessinsider.com/former-goldman-intern-this-is...
• cnorgate 15y ago
  The problem with the world of finance is that it does not create anything in and of itself. It is a derivative of true commerce, true business, the real world. Now that the big bonuses, expensive sell-weekends and general prestige associated with being in finance have washed away, people on Wall St are looking around realizing the emperor has no clothes. There's no money anymore, and there was never anything ultimately redeeming about their work. The only silver lining is that hopefully now our best and brightest will be focused on solving real problems that matter.
• binarysolo 15y ago
  I've no love for GS, but an interesting counterpoint to consider (from http://www.forbes.com/sites/bruceupbin/2012/03/14/unshocked-by-goldman-one-investor-says-buy-more/ http://www.forbes.com/sites/bruceupbin/2012/03/14/unshocked-... ): "'There are a couple of things out of place. 1) This guy has been at firm for 12 years and is only a VP…a pissant of sorts. He should have been an MD-light by now, so clearly he has been running in place for some time. 2) He was in U.S. equity derivatives in London…sort of like equities in Dallas…more confirmation he is a lightweight. Somewhere along the line he has had sand kicked in his face…and is not as good as he thinks he is. That happens to a lot of high achievers there.'"
  • brown9-2 15y ago
    Still, his lack of success within Goldman doesn't take away from what he has to say. This is basically an ad hominem attack - instead of refuting what he has to say, GS (or it's supporters) attempt to tarnish this guy's image.
  • vacri 15y ago
    The article states that he is an Executive Director, one step higher than the VP that your quote claims him to be.
    • ebaysucks 15y ago
      Yes, in fact Executive Director _is_ the "MD light" at Goldman.
  • ilkandi 15y ago
    Given what it takes to be admitted to the firm, let alone stay in it for 12 years, I wouldn't consider him "pissant". That time guarantees he's survived and gone above probably 100K other bright hires over the years. Can't say that for most companies. My take, it's just the press milking the point/counterpoint style of argument to attract more eyeballs and ad dollars.
• hasker 15y ago
  I worked in the business trading interest rate products before deciding to return to school. I still miss the game a lot and waste way too much time trying to supplement my PhD stipend trading stocks, equity options, and futures. Mr. Smith's editorial describes a lot of the reasons I left when paired with the dire outlook for the business now and back then. As others sort of noted, much of the business changed simply from the sources of profits. OTC (Over the Counter, i.e, non exchange traded) derivatives dealing and proprietary trading started driving all revenue. From a cursory glance OTC derivatives create a zero sum game with the client. The bank takes one side, the client takes the other. Yes, on a large enough scale things should balance out, and perhaps no moral hazards will develop, but at the most fundamental level the client or the dealer wins. This opens the door to a very unique class of businesses including casinos, some annuity providers, buyers' agents in real estate where the provider has a strong conflict of interest with their client. Previously banks did not have these conflicts, or the divisons with these conflicts were not the dominant earners. Well maybe M&A advisors on the buyers' side had an issue, but that was generally less lucrative to advising the seller or on a hot IPO. The question becomes, is this a Goldman problem, or a banking industry problem? I am studying for the CFA, simply because the information is fresh in my head, and I may need it some day. CFA ethics clearly states that one must always put the client's interests ahead of the firm. I remain foreign to the sort of magic that allows for this, while allowing one to operate as a derivatives dealer and stay solvent. Simultaneous, Mr. Smith forgets about the sort of horrible clients these banks must deal with on a daily basis. Remember that the best guys at these firms are the ones that get spots at hedge funds, asset managers, and sovereign wealth funds. They know how to screw a counter-party better than anyone. Anyone who has ever sat on a fixed income trading desk knows how viciously PIMCO swings around their size to trade through the market. Every junior trader has gotten crossed by a non-repetent small hedge fund. I doubt the clients ever thought Goldman or any other bank was their friend. To assume that a bank would help a client when there is blood in the water is lunacy. You can probably tell I still have a lot of unresolved issues about exactly what is right here. I have major issues with conflicts of interests. If I ever return to finance, I will stay on the buy side. At least that way my interests and the client's are fully aligned. I deliver higher returns and get paid more.
• FLengyel 15y ago
  As a New York Times Op-Ed author myself (with a friend; URL http://www.nytimes.com/2006/06/09/opinion/09orlow.html http://www.nytimes.com/2006/06/09/opinion/09orlow.html), I can assert that the typical trajectory after such a performance is to end up commenting on Hacker News.
• untitledwiz 15y ago
  Tech bubble or not I am just glad that we may be seeing a decline and maybe even a reversal of the brain drain by Wall Street.
  • untitledwiz 15y ago
    The op-ed also reminded me of this: http://adgrok.com/why-founding-a-three-person-startup-with-zero-revenue-is-better-than-working-for-goldman-sachs/ http://adgrok.com/why-founding-a-three-person-startup-with-z...
• DividesByZero 15y ago
  I'm unsure how any company founded on dead labor can possibly have anything other than a toxic culture.
• DividesByZero 15y ago
  I'm unsure how any company founded on dead labor can possibly have anything other than a toxic culture.
• DividesByZero 15y ago
  I'm unsure how an organisation which does not add any value and is based on dead labor can possibly have anything other than a toxic culture. When your primary goal is to repackage existing value and make money from usury, it's a little bit steep to expect your employees to care about anything else - your primary incentive is how much money you can extract from dead labor, and not 'the success of clients' or anything else.
• DanBC 15y ago
  (http://www.businessweek.com/news/2012-03-14/goldman-stunned-by-op-ed-loses-2-dot-2-billion-for-shareholders http://www.businessweek.com/news/2012-03-14/goldman-stunned-...) $2.2Billion is, to me, a lot of money.
• marajit 15y ago
  "It astounds me how little senior management gets a basic truth: If clients don’t trust you they will eventually stop doing business with you. It doesn’t matter how smart you are." What if clients don't trust anyone? Its about risk/reward ratio. Trust/faith went out the window when the scam of a monotheist God gave into the lesser mistake of ubiquitous currency. The religion of the Semites was nursed on trade. Money is the visible face of the Abrahamic God. Its with this righteousness that Goldman Sachs engages in the world with such impunity. Gone are the lineages of the priestly classes. Gone is the prudent care of the warrior/king caste. The merchants rule in the decadent age. Soon we will be holden to the mind of the sudra slaves.
• artist777 15y ago
  http://buyviagrashop.com/ http://buyviagrashop.com/ Buy Cheap Viagra Without Prescription
• known 15y ago
  I used to work for GS. The pay was extraordinary. But the work culture/environment will turn you into a paranoid.