Thursday 02 / May / 2024
New York: Goldman Sachs Group’s dealmakers endured job cuts and a tough bonus season. Then the penny pinchers turned to their beloved phones.
In a push to cut costs and shift employees from BlackBerry devices to personal mobile phones, the firm is imposing a new policy around the world for reimbursing data and calling expenses, according to an internal memo seen by Bloomberg.
Goldman Sachs will now chip in $10 for data charges on US phone bills, 10 pounds in the UK, 10 euros in Germany and HK$100 in Hong Kong, according to the memo. It also spells out conditions for reimbursing costs for phone calls. The changes began March 1 and take full effect in the coming months.
Already, the new plan is rankling some dealmakers, who spend much of their day on the phone calling and emailing clients to advise on transactions or drum up new business. They asked not to be identified discussing internal matters. In the past, Goldman Sachs generally issued BlackBerry work phones and covered full bills, one of the people said.
Here are some other highlights of the new policy:
Employees may keep their work phones if they’re required to use recorded lines. For business travellers, the bank will reimburse international data roaming and WiFi, as well as calls if employees itemise their monthly bills. But they’re encouraged to use WiFi connectivity for calls to avoid roaming charges. The firm recognises employees may need to stay connected when on vacation or leave, but it won’t cover their WiFi while on the road. They can, however, itemise those work calls.
Previously, Goldman Sachs didn’t have a firmwide policy for how to reimburse bankers and traders for using personal devices, giving managers across different teams and divisions more leeway, according to a person familiar with the policy.
The firm chose the $10 figure because that’s typically what it costs for a gigabyte of data, and an application used by employees for work emails doesn’t usually consume more than that, said the person.
The policy is the latest step in a sweeping effort to reduce expenses. In early 2016, Chief Executive Officer Lloyd Blankfein embarked on the firm’s biggest cost-cutting push in years, limiting airfare, hotels and entertainment unless it served clients and spending less on printing pitch books or brochures, people with knowledge of the policy said at the time.
The belt-tightening helped shave $900 million from annual expenses and, with fewer legal and regulatory fines, drove 2016 non-compensation expenses to the lowest level in a decade. That led to a 22 per cent jump in net income even as revenue fell 9 per cent last year.
The bank’s stock has surged 63 per cent over the past 12 months, the best performance in the 30-company Dow Jones Industrial Average, and hit a record-high this week. Much of that gain has come after the US election in November, as investors bet the new administration will ease costly rules and cut taxes to accelerate growth.
