Layoffs are also expected, but it’s unclear which department will bear the brunt of the redundancies.
Wall Street giant Goldman Sachs is merging its investment banking and trading departments and also combining its asset and wealth management divisions. A third unit, dubbed Platform Solutions, will include fintech and cloud-based platforms such as home-loan specialist GreenSky, which Goldman purchased in March.
Dan Dees, Jim Esposito and Ashok Varadhan will oversee the new investment bank/trading entity, Global Banking & Markets; Marc Nachmann will lead Asset & Wealth Management; and Stephanie Cohen will helm Platform Solutions.
This “realignment,” as CEO David Solomon called it, mirrors a trend: Goldman rivals, including JPMorgan Chase and Morgan Stanley, have similar structures.
However, Goldman differs due to its struggling consumer digital-banking offering, Marcus. The business, launched in 2016, is among the worst-performing big US card issuers and is expected to lose more than $1.2 billion in 2022—a year it was estimated to break even.
Part of Marcus will now fall under the new Asset & Wealth Management business, where it will continue marketing consumer services to employees of large companies that are Goldman clients. The credit card elements of Marcus (i.e., partnerships with Apple and General Motors) will shift to the Platform Solutions segment, a Goldman Sachs spokesperson confirmed.
Solomon, who has been in charge since 2018, has made other organizational changes. Recall Goldman’s first-ever “investor day” in early 2020: The company delivered presentations on various strategic priorities and detailed changes to what were, at the time, four “core units.”
“We laid out a concrete plan to boost shareholder value,” says a spokesperson. “This three-prong strategy is the next phase in that growth plan.”
Goldman also announced better-than-expected earnings, in which it reported more than $3 billion in profit for the third quarter. That’s 43% less than what it reported for the same three-month period last year.
Layoffs are also expected, but it’s unclear which department will bear the brunt of the redundancies. It’s worth noting that global M&A volume and deal values are down considerably in 2022, and Goldman will likely cut workers based on annual performance reviews.