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Morning Coffee: Bank finds 50% of staff are a hindrance. Art of Goldman politics

Remember when Hank Paulson, then CEO of Goldman Sachs said 15-20% of the firm’s staff added 80% of the value? The year was 2003 and Goldman was cutting costs, but Paulson was quickly forced to apologize for being “glib and insensitive.”

The year is now 2017 and another bank CEO has said something similar, but worse. And there’s no sign of a retraction.

Slawomir Krupa, the head of Societe Generale Americas, told Business Insider that SocGen has spent the past few years learning how to do more with less. In the process, it discovered that a large proportion of its staff were pointless.

SocGen took teams of 10, 15, or 20 people and cut them in half, said Krupa. Following these incisions it found that, “all of a sudden business flourishes.” In some cases, teams with half the people doubled their revenues.

SocGen is committed to cutting €220m ($237m) in costs from its investment bank, around half of which are yet to come. The implication is that many bankers – in SocGen’s American office at least – are fillers. In their absence, the doers can thrive.

How does SocGen spot the causers of the congestion? Krupa says it takes both diligence and patience. Senior bankers need to listen carefully and devote the time required to understanding what’s really going on.  It’s all about answering the questions: “Who exactly is creating value?” Who is the one who is very good at managing? Who is the one who actually sees clients? And who is the one who understands the flows in the market? And who can work properly with the sales force?”

Bankers at other firms need to hope this doesn’t catch on.

Separately, Gary Cohn at the White House is doing a good job of demonstrating the political arts we supposed he picked up after 26 years at Goldman Sachs.

Following reports that Cohn had formed a “faction” and successfully sidelined Peter Navarro, an economist averse to free trade, the New York Times reports that the ex-Goldman COO has also been demonstrating how to stand your ground against Trump.

In a recent Oval office meeting, Trump reportedly interrupted Cohn, who instructed the President, “Let me finish.” Unusually Trump did just that. It won’t be long before Gary Cohn will be putting his leg up on the Oval office desk.


The number of EU migrants working in finance fell by 28,000 in the final three months of last year, a 6% drop and the biggest fall of any major sector. (WSJ) 

J.P. Morgan has been growing its prime services revenues because it’s interested in the “halo revenues” in equities and electronic trading that come with the prime business. (Financial Times)

Senior Barclays banker who cleaned McDonalds toilets is resigning to fight for civil liberties under Trump. (Bloomberg) 

LIBOR trader Tom Hayes avoided videoconferencing software because he disliked eye contact. This met he conducted most of his work over instant message, creating a damning trove of evidence. (Bloomberg) 

UK bankers and accountants could be banned from working in the EU after Brexit. (Independent) 

Dublin and Amsterdam would be better options than Frankfurt post-Brexit. (Bloomberg) 

Why has women’s share of ‘computer occupations’ declined? (Department of Labor) 

Cost of living index that considers cocktails, Michelin-starred restaurants and Burberry shops says London’s become cheaper. (Bloomberg)  

Inspirational quotes from the Credit Suisse gym. (Business Insider)

Senior bankers given permission to read novels. (Conde Naste Traveler) 


Photo credit:  mediaphotos/Getty

AUTHORSarah Butcher Global Editor

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