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Goldman Sachs needs fewer bankers in Great Britain, according to data

2 weeks ago by Jon Marino in Earnings

It's old with the out, and in with the new in 2020. 

Goldman Sachs' ($NYSE:GS) departmental shuffle to new segments including Global Markets, Asset Management and Consumer & Wealth Management, will do away with prior categories called Institutional Client Services, Investing & Lending and Investment Management. The only part of the Goldman operation remaining untouched, from a naming perspective, is its prized investment banking business - and more on them, in a bit. 

The idea behind the move is that the increased transparency - and, perhaps, the move to grow its presence in the digital and consumer banking space - will help Goldman stock catch up to its peers', which have also relied on legacy consumer businesses. Still, it comes as the entire sector is implementing tech to strip out tens of thousands of jobs, and as bank boards and C-suites are forced to make challenging decisions in the face of negative interest rates in some regions - and falling rates in critical markets. 

Alternative data is able to measure activity across key segments of Goldman's businesses (there are nearly two dozen different job categories) and we're able to gauge potential hiring through each. Our first chart tracks all Goldman investment banking jobs, which have a very cyclical pattern - soaring to 'peak openings' right before the end of fiscal quarters in June and in December. 

Drilling down into data we're able to inspect jobs by country - and while US investment banking job postings (not shown) rose more in the second half of 2019, this wasn't the case in Great Britain. In Great Britain, job postings for investment banking hit a peak in the first half of the year, and never grew back to more than 50% that figure - an aberration in comparison to other countries. It may be a signal that jobs are flowing away from the banking hub of London, as lawmakers there gird for Brexit. 

Among the business segments Goldman appeared to be growing, are 'Operations,' 'Risk,' and 'Human Capital Management.' The chart above tracks postings in Consumer and Investment Management, which are up nearly 160% in a span of less than 12 months. It's notable as Goldman grows new segments through its Marcus platform and its Apple partnership - and could be a division that continues to grow as others are resized as part of the business' management. 

According to alternative data we track (not shown) segments of Goldman's business seeing declining job postings laterly include its 'investment management' unit - which may be tied to the chart above. Other businesses seeing fewer job postings include 'global investment research' and 'realty management.' We'll learn more about what Goldman's growing, and perhaps what it isn't, when the bank reports earnings on January 15 - analysts tracked by Zacks Investment Research are expecting EPS of $5.18 per share. We'll also get a new window into Goldman's plans on January 29, when the bank hosts its very first investor day, in an effort to boost transparency. 

About the Data: 

Thinknum tracks companies using the information they post online - jobs, social and web traffic, product sales and app ratings - and creates data sets that measure factors like hiring, revenue and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales. 

Further Reading: 

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Jon Marino

Jon Marino is Thinknum's finance editor, covering the impacts of alternative data on public companies and investors. Prior to joining Thinknum, Jon worked in the ...

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