It is not news that the financial sector is shedding jobs. The sector is shrinking and faring worse than the economy at large. Some layoffs, though, are more eye catching. When dozens of Goldman Sachs partners 'retire' in unison, the media takes notice. Partnership at Goldman means inclusion in the highest echelon of the firm and is a key tool used to motivate and retain younger employees, BusinessInsider writes.
It has been reported that the firm's lackluster performance this year caused the departures. But cost cutting or partner performance alone doesn't fully explain what is going on. The actual problem is that partners just aren't leaving. Why not? They're are getting paid less, so it takes longer to acquire a nest egg considered substantial by Street standards.
On top of that, the traditional landing spots for partners have dried up. Starting your own hedge fund or taking a senior role at a private equity firm isn't happening. And the days are gone when you can leave Goldman Sachs and go into government service or run a prominent nonprofit.
The result is that the average tenure of partners, which was already lengthy relative to other firm's senior employees, has increased. Add to this that Goldman had historically large partner 'classes' during the height of the boom and the number of partners has swollen to 470. For comparison, when Goldman went public in 1999, it had 221 partners.
Read more: http://www.businessinsider.com/why-are-so-many-partners-leaving-goldman-sachs-2011-12
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