Cheaper: Goldman Sachs Is Firing Employees In The US So It Can Hire 1,000 In Singapore
As Goldman Sachs (GS) plans major job cuts in the United States, the firm is planning to expand overseas with a major hiring spree in Singapore and taking the unusual step of alerting Congress before even it’s widely known to its own shareholders, the FOX Business Network has learned.
Goldman is so concerned about the potential for criticism that the firm’s representatives have been alerting staffers of lawmakers in Washington of the hiring spree in recent weeks as a way to mollify any concerns they may have about previously undisclosed plans to add 1,000 jobs to the firm’s Singapore office, according to people in Washington with direct knowledge if the matter. Goldman is concerned about criticism because it is adding those jobs while it is planning what could be a significant retrenchment in its U.S. workforce, these people say.
With profits coming under pressure in the U.S., Goldman appears to be launching possibly the most aggressive effort among the big banks to expand operations overseas where the business climate is more favorable, analysts say. The firm is betting that if it can clamp down on any negative publicity by alerting Congressional leaders of the move first, it can continue to move jobs in higher growth areas globally, while it cuts jobs and slashes expenses in its lower-growth areas, such as its U.S. operations, people with knowledge of the matter say.
The jobs in Singapore are likely to be “high-paying, skilled positions in sales and investment banking,” the same types that are likely to be cut in the firm’s domestic operations, according to one person with knowledge of the matter. This person added that the firm has recently briefed people in Washington about the new overseas jobs because it “is afraid of the fallout” as it plans to slash $1 billion in costs over the next year — a move that will mean a significant, though still undetermined number of layoffs across its operations, though people close to the firm expect the biggest hit to come from the US. Goldman also plans a much smaller expansion in its Brazil unit and in India.
Goldman has good reason to worry about the fallout. The firm has faced more than two years of intense media scrutiny, stiff criticism from lawmakers in Washington, and regulatory probes leading to big fines over its business practices. Goldman’s chief executive Lloyd Blankfein has been a fixture at government hearings involving Wall Street activities, including those that led up to the 2008 financial collapse. US Senator Carl Levin has referred a report from his investigative committee to the U.S. Justice Department over some of the firm’s questionable deal making, and whether Blankfein had perjured himself during his testimony.