The employee’s critique of the bank, in which it was alleged that senior bosses regularly described clients as muppets, was seized upon by rival bankers only too pleased to denigrate the bank they fear most in the financial markets. The article also described the culture at Goldman Sachs as toxic and destructive.
After a day of massively negative publicity, Goldman Sach’s top two executives Lloyd Blankfein and Gary Cohn emailed all staff, rejecting the allegations made by its recent ex-employee Greg Smith (pictured). Instead, they highlighted recent surveys that named the bank as a good place to work and one that treated its clients well.
Blankfein and Cohn said: “Just two weeks ago, Goldman Sachs was named one of the best places to work in the United Kingdom, where this employee resides. The firm was the highest placed financial services company for the third consecutive year and was the only one in its peer group to make the top 25.
“We are far from perfect, but where the firm has seen a problem, we’ve responded to it seriously and substantively,” the email continues.
However, around the City bankers could hardly contain their pleasure in watching Goldman Sachs’ reputation being questioned.
“That was a bulls-eye of a rant,” said one banker. “It was almost like an angry love letter.”
Another banker said: “This is big. They will find it hard to deal with this.”
In his New York Times piece, Smith, who worked in equity derivatives, had described a decline in culture at the bank, which, he claimed, had become increasingly focused on making decisions based on short-term profit-making.
Outsiders said this observation might come as a blow to Michael Sherwood, the London-based executive who many see as likely to replace Blankfein in the next couple of years or so. “Sherwood is the last person to give culture to that bank,” said one banker.
The Goldman staff email offered a route for employees to come forward with any concerns they had about the way the firm was run and it promised that Smith’s concerns, as articulated in the New York Times article, would also be looked at carefully.
It said that anybody that was unhappy about issues about the way the firm was being run had “a mechanism for anonymously expressing their concerns. We are not aware that the writer of the opinion piece expressed misgivings through this avenue, however, if an individual expresses issues, we examine them carefully and we will be doing so in this case.”