By Pam Martens and Russ Martens: July 19, 2023 ~
For more than two decades, we have been reading about former employees of Goldman Sachs who have fled jobs there over a toxic, soul-crushing work culture. The pace of these stories has been picking up steam, rather than declining. Shareholders of Goldman Sachs should be asking themselves, is this good for the future of the company over the long haul and the price of its stock.
Here’s a small sampling of some of the complaints from 2004 to the present:
In 2004, Nomi Prins, now a well-known author and a former Managing Director at Goldman Sachs, wrote the following in her book, Other People’s Money: The Corporate Mugging of America:
“When I left Wall Street, at the height of a wave of scandals uncovering scores of massively destructive deceptions, my choice was based on a very personal sense of right and wrong…So, when people who didn’t know me very well asked me why I left the banking industry after a fifteen-year climb up the corporate ladder, I answered, ‘Goldman Sachs.’ For it was not until I reached the inner sanctum of this autocratic and hypocritical organization – one too conceited to have its name or logo visible from the sidewalk of its 85 Broad Street headquarters [now relocated to 200 West Street] that I realized I had to get out…The fact that my decision coincided with corporate malfeasance of epic proportions made me realize that it was far more important to use my knowledge to be part of the solution than to continue being part of the problem.”
In 2010, three former female employees sued Goldman Sachs for discriminating against women. They cited the following figures: only 29 percent of Goldman’s Vice Presidents were women; 17 percent of its Managing Directors were women; and just 14 percent of its Partners were women. Goldman Sachs battled this case in court for the next 13 years. After the case grew to a class action representing thousands of women, Goldman finally settled the case this past May for $215 million.
You know things are really bad in your workplace when an employee has to scream a cry for help on the OpEd page of the New York Times. That’s exactly what Greg Smith did on March 4, 2012. At the time, Smith was an Executive Director at Goldman. He wrote: “It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as ‘muppets,’ sometimes over internal e-mail,” Smith said. He called the environment at Goldman “as toxic and destructive as I have ever seen it.” Smith provided a more detailed account in a subsequent book, “Why I Left Goldman Sachs.”
In 2017, Rebecca Allen, a Black employee in Goldman’s Private Wealth Management division, filed a federal lawsuit against the firm for racial discrimination. Allen had a Masters in Finance from Columbia University. She wrote in the complaint that, at that time, Goldman “has virtually no Black presence in its leadership” and “There is only one Black employee on Goldman Sachs’s 32-person Management Committee.” Allen also detailed how one of her key clients was “taken away from her for explicitly racist reasons.” Allen eventually voluntarily withdrew her complaint, which could mean that a settlement was reached.
In 2021, Bloomberg News reporters Gillian Tan, Sridhar Natarajan, and Tracy Alloway detailed how first-year investment analysts at Goldman Sachs were so desperate for relief from an “inhumane” work culture at Goldman that they prepared a 24-question survey and presented it as a pitch deck to management of the firm. One survey question asked how many hours the investment analyst had worked that week. The mean answer was 105 hours. Two other slides inquired about sleep. The mean answers were that the employee was getting only 5 hours of sleep a night that began at 3 a.m. Another question asked the employee, on a scale of 1 to 10 with 10 being the healthiest, to rate their mental health before and after starting their employment at Goldman Sachs. The mean answer was 8.8 before joining Goldman Sachs and 2.8 afterwards. In answer to the question as to whether the employee felt like they had been the victim of workplace abuse, 77 percent answered “yes.”
In August of 2022, Wall Street On Parade reviewed the new book by Jamie Fiore Higgins, who had spent her entire Wall Street career at Goldman Sachs – a span of just under 18 years. The book title pretty much says it all: Bully Market: My Story of Money and Misogyny at Goldman Sachs. The overall narrative is that the sick Goldman culture will envelope you in the end. Fiore Higgins writes: “I felt like human poison. I ruined everything I touched – marriages, careers, and relationships. After working for years in this awful environment, I’d become just as toxic as Goldman Sachs.”
Now we have a new report from the U.K.’s Telegraph newspaper last Saturday that employees are so stressed out at Goldman Sachs that they’re “sobbing” at meetings. The allegations come from Ian Dodd, a former recruitment chief for the firm who is suing Goldman. Dodd claims that the pressure to work excessively long hours caused him to have a mental breakdown.
Goldman has denied all allegations against it. But given the numerosity and the span of time and the persistence of these allegations, one is left with the feeling that where there is this much smoke, there’s a lot of bad stuff smoldering inside Goldman Sachs.