Goldman Sachs hired 100 people ahead of its job cuts
Goldman Sachs reported its Q1 results for 2025 today. On the face of it, things are okay: the return on equity was a solid 15%, net earnings rose by 28%, and the bank added headcount.
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Goldman welcomed 100 net new people into its fold between the ends of Q1 2024 and 2025. It’s a small haul, and fits between JPMorgan’s 400-person shed and Morgan Stanley's 600-person growth.
The new hires came despite the fact that Goldman plans to trim somewhere around 3 to 5% of its staff (around 2,000 people) in May, as part of a regular annual performance review. These cuts are most expected to impact vice presidents (VPs).
The addition of 100 people in the first quarter compared quite positively to previous years. Goldman fired 900 people in Q1 of 2024, and over 3,000 people in Q1 of 2023. As we noted earlier, hiring was tentatively picking up across the market for a while.
Goldman itself says Q1 2025 was a "strong quarter." However, Goldman's performance doesn't look that impressive compared to rival banks.
As the chart below shows, Goldman performed poorly relative to JPMorgan and Morgan Stanley in terms of year-on-year revenue growth across both sales & trading and investment banking. Even though, equities sales and trading revenues at the firm were their highest ever, growth of 27% was far below rivals.
Goldman's M&A bankers had a particularly poor three months. Their revenues fell by 22% while JPMorgan and Morgan Stanley grew M&A revenues by 16% and 22%, respectively. Goldman indirectly blamed a "strong" Q1 2024 for the decline, but that wasn't a standout quarter for its M&A bankers, either.
Amidst what looks more like a mixed than a strong performance, Goldman seems to have been circumspect when it comes to pay. Compensation spending rose by 9% as a whole at JPMorgan's commercial and investment bank, and by 22% at Morgan Stanley's Institutional Securities Business. But across Goldman, pay (per head) was only up by 1% after the hiring across the year. Most of the overall compensation increase seems likely destined for equities salespeople and traders.
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