Lloyd Blankfein, the chief executive of Goldman Sachs, has defended the firm after an employee attacked a “toxic” and “destructive” culture at the leading investment bank that is increasingly focused on making money from clients, in an article in the New York Times.
Greg Smith, who is resigning today as a Goldman Sachs executive director and head of its US equity derivatives business in Europe, the Middle East and Africa after 12 years, wrote:
“I can honestly say that the environment now is as toxic and destructive as I have ever seen it. 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.”
In a memo to staff, Goldman chief executive Lloyd Blankfein said he was “disappointed to read the assertions… that do not reflect our values, our culture and how the vast majority of people at Goldman Sachs think about the firm”.
Mr Blankfein wrote that although it was “not shocking that some people could feel disgruntled” in a company of Goldman’s size (it has 30,000 employees) and that the firm is “far from perfect”, he expects staff to “find the words you read today foreign from your own day-to-day experiences”.
In Mr Smith’s article entitled Why I Am Leaving Goldman Sachs he writes that over the past twelve months he had seen five different managing directors refer to their own clients as “muppets”, sometimes over internal e-mail.
“I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or progress was not part of the thought process at all.”
Mr Smith said that the bank was “too integral to global finance to continue to act this way”.