http://www.businessinsider.com/
- Feb. 10, 2016, 8:46 AM
Wikimedia CommonsBengaluru, India.
That's because a quarter of Goldman Sachs' staff work in lower-cost "strategic locations" around the world.
About 25% of the global investment bank's headcount is based in cheaper locations in the US and abroad, according to a presentation from CEO Lloyd Blankfein at the Credit Suisse Financial Services Forum on Tuesday.
Goldman Sachs had 36,800 staff at the end of 2015, which means 9,200 staff are based in these low-cost locations. By way of comparison, Goldman Sachs employs around 10,000 staff in New York and Jersey City.
The number of staff based in low-cost locations has increased by 3,000 since 2012, according to the presentation. Goldman's total headcount has increased 4,400 in the same period.
The majority of the "strategic location" jobs are in Bengaluru, or Bangalore, also known as the Silicon Valley of India. Goldman Sachs' headcount in the city stands at around 5,700.
Another big chunk, around 2,200, are in Salt Lake City, while there are around 730 staff in the Dallas area.
The bulk of these jobs are in tech. Goldman Sachs said Tuesday that 41% of its tech workforce now work in low-cost locations, up substantially from previous years.
Tech headcount went up 8% between 2012 and 2015, and about half of Goldman's new 2,800 new hires in 2015 were back-office positions in the technology, compliance, and operations divisions.
Morgan Stanley in January announced a new cost-saving plan that will likely see jobs moved to lower-cost centers, too.
"Too many employees based in high-cost centers are doing work that can sensibly be done in lower-cost centers," CEO James Gorman said at the time. "Now is the time to tackle head-on our infrastructure costs."
UBS announced plans earlier this month to move about 2,500 jobs to low-cost locations such as Poland, India, China, and Tennessee over the next year.
Deutsche Bank, meanwhile, has a big office in Jacksonville, Florida.
Here are the details on Goldman Sachs' low cost locations:
Goldman Sachs
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Pack your bags, Wall Streeters: Your jobs are moving to Nashville
- Feb. 2, 2016, 3:15 PM
- 40,112
Yes, Nashville.
The bank announced fourth-quarter results on Tuesday, and in an accompanying presentation it set out examples of cost cuts in the corporate center, which houses things like human resources and IT.
As the chart below shows, the bank has created 500 jobs in Nashville since the end of 2014, and plans to add another 100.
Admittedly, that isn't a huge number. The Americas business at UBS made 2.8 billion Swiss francs in revenue in the fourth-quarter 2015. Still, it is striking that 27% of staff in the corporate center now work in offshore or "nearshore" locations, up nine points in two years.
In Poland, the bank expects to add another 1,300 staff, while it expects to have 1,800 staff in Pune, India, by the end of 2016. It also expects to add 400 more staff in Shanghai.
"In addition to lower future-personnel expenses, this is allowing us to realize efficiency in high-cost real estate," Kirt Gardner, the group chief financial officer, said on a conference call.
UBS isn't the only bank heading down this road. A number of banks believe that you don't need to house back-office staff in high-end New York City or London real estate. They can do the same job — and probably have a better quality of life — out in Nashville.
Morgan Stanley CEO James Gorman said on that bank's fourth-quarter earnings call that staff would be moved to lower-cost locations.
"Too many employees based in high-cost centers are doing
work that can sensibly be done in lower-cost centers," he said. "Now is
the time to tackle head-on our infrastructure costs."
Goldman Sachs has moved thousands of jobs to places such as Salt Lake City, while Deutsche Bank has a big office in Jacksonville, Florida.
Here's the key bit from UBS presentation:
UBS
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