Goldman Sachs tower: Trouble at the top? Photo credit: click-see
What’s the best way to quit your job? Perhaps a formal letter, thanking the company for the opportunities offered but saying it’s time for you to move on. Maybe a personal email to your boss, or even a face-to-face meeting.
But for Greg Smith, Goldman Sachs executive director, these methods were apparently far too pedestrian. Smith has opted to jack in his job via an op-ed in The New York Times.
The exec begins his letter with a short summary of his experience at the investment bank: having started as a summer intern, Smith spent twelve years with the company in New York and London. So far, so benign. But then: “I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.”
Ouch.
Smith goes on to explain exactly what he thinks is wrong at Goldmans: “To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money.” The culture at the investment bank has changed for the worst over the last few years, said Smith, and this is a problem of leadership. According to Smith, the investment bank treats clients with contempt, with several managing directors referring to them as “muppets”.
Goldman Sachs is one of the most influential investment banks in the world. But the firm has faced controversy in the past, not least for its role in masking the Greek debt crisis. Given that bankers are not exactly topping public popularity lists at the moment, how will Goldmans react to the explosive op-ed?
“It makes me ill how callously people talk about ripping their clients off,” wrote Goldman Sachs exec Greg Smith in The New York Times.
Too hot to handle? This is a rather tricky PR situation for Goldman Sachs, wrote Iain Martin in The Telegraph: “If Smith is immediately machine-gunned by legions of Goldman ‘flacks’ – financial PRs – won’t it actually rather confirm the thrust of his allegations about the culture of Goldman Sachs? Have they the wit to engage properly?”
Matt Taibbi famously described Goldman Sachs as “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money” in a Rolling Stone article that slammed the investment bank.
Will the letter have any effect? Dashiell Bennett was pessimistic at The Atlantic Wire that Smith’s letter would have any effect on the Goldmans business culture: “The fact that Smith would choose to leave rather than fight back suggests the patient is too far gone to save.” In any case, Goldmans seems immune to criticism: “The fact that Goldman — despite a rough year of earnings and a public approval rating rivaling Congress — is still one of Wall Street’s most powerful firms, suggests that the ‘Vampire Squid’ really can’t be killed,” Bennett wrote.