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Goldman Sachs Fires Transaction Banking Chief Moorthy, Other Leaders Over Lapses
The firm sacked several leaders of the unit who communicated on unauthorized channels and didn’t comply with an internal review.
Sridhar Natarajan
14 Sep 2023
(Bloomberg) -- Goldman Sachs Group Inc. fired transaction banking executives including the head of the business, Hari Moorthy, over compliance lapses, a person with direct knowledge of the matter said.
The Wall Street firm terminated several leaders of the unit who communicated on unauthorized channels and didn’t comply with an internal review, according to a memo to employees seen by Bloomberg. Moorthy, who isn’t named in the memo, didn’t immediately respond to messages seeking comment.
“We are not going to comment on individual disciplinary matters. As a general matter, we take our communications policy seriously, and we expect all of our personnel to comply with it,” the bank said in a statement. “Goldman Sachs remains fully committed to our transaction banking business.”
The abrupt ousters hit a unit that Goldman has been working hard to grow, as it looks to soak up more corporate deposits and generate steady fees. At an investor day in February, Chief Executive Officer David Solomon said the young business — already profitable — is just at the beginning of its potential to deliver more for the company.
Wall Street banks are under heavy pressure to police employees’ communications following a US crackdown on the industry’s widespread use of WhatsApp and other unauthorized platforms. Federal rules require firms to monitor and archive all work-related messages. Goldman was one of several banks that regulators slapped with fines of $200 million apiece last year.
In recent months, the transaction banking unit has also faced Federal Reserve scrutiny that previously focused on the company’s oversight of consumer banking. The dismissals are unrelated to those inquiries, the person with knowledge of the matter said.
The internal memo, written by Goldman Treasurer Philip Berlinski, reminds employees of their duty to comply with rules and to report any concerns. Berlinski said he will oversee the business with Akila Raman and Luc Teboul, and that the company is staunchly committed to its continued growth.
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Citigroup plans job cuts as it revamps top management structure
SEP 14, 2023
The banking giant is preparing for a wave of job cuts as it launches its biggest restructuring in two decades.
SEP 14, 2023
NEW YORK - Citigroup is preparing for a wave of job cuts as chief executive Jane Fraser launched the biggest restructuring of the Wall Street giant in two decades, part of her effort to reverse a years-long slump in the stock price.
The company will now operate five main businesses and eliminate the three regional chiefs who oversee operations in about 160 countries around the world, according to a statement on Wednesday. At least four of Ms Fraser’s senior deputies got new roles in the shake-up, and the firm is looking for a head of banking, which includes oversight of the investment-banking unit.
The moves will result in a number of job cuts in Citigroup’s back-office functions. The company does not yet have firm targets for how many employees will be affected, according to people familiar with the matter.
“We have taken hard, consequential, tough decisions here,” Ms Fraser told investors at a conference. “They are not going to be universally popular within our bank. It’s going to make some of our people very uncomfortable. I am absolutely fine with that.”
Citigroup shares fell 1.7 per cent on Wednesday. Still, the stock is down roughly 40 per cent since Ms Fraser took over in early 2021, more than double the decline of any major US rival in that period.
Five businesses
The firm is scrapping its two long-time core operating units, one of which focused on institutional clients while the other housed the firm’s consumer offerings.
Citigroup will instead now have five main operating units, including a services unit led by Mr Shahmir Khaliq, a trading division headed by Mr Andy Morton and a US personal-banking division under Mr Gonzalo Luchetti. Mr Peter Babej will lead the banking division on an interim basis, while Mr Andy Sieg is set to join later in September from Bank of America to lead Citigroup’s wealth offerings.
All five men will be on Ms Fraser’s executive management team, which will expand to 19 people. That includes Mr Ernesto Torres Cantu as head of international, while Mr Sunil Garg continues to lead North America.
“This should help reduce the fiefdoms that have plagued the firm in lieu of greater coordination,” said Mr Mike Mayo, an analyst at Wells Fargo & Co. “The risk for this type of move is always undesired departures and internal strife, especially with Citi’s history.”
Back-office functions
Ms Fraser said her moves on Wednesday were motivated, in part, by a desire to hold managers more accountable in her push to improve Citigroup’s returns, which have long lagged behind peers.
To that end, she said, the firm has eliminated most of the co-heads it previously had running some of its largest and most important businesses.
“While I’m confident that the steps we’re taking will simplify the organisation and improve our competitiveness, they will result in people changing roles or leaving our firm,” Ms Fraser said in a memo to staff. “The scope of some roles has been intentionally changed to free up our producers and dealmakers to focus more of their time on clients and drive our results.”
Citigroup has seen its headcount swell to 240,000 in recent years as it hired a bevy of engineers, consultants and other compliance workers. With its upcoming push to slash staffing levels, the bank will evaluate the tens of thousands of workers it has dedicated to back-office functions such as finance, human resources, operations and technology.
That is because many of those workers’ roles were tied to a certain region, the former institutional clients group or the personal banking and wealth management division.
When contacted by The Straits Times, a Citi Singapore spokesperson said on Thursday: “Singapore, where Citi has operated in for over 120 years, remains an important hub.
“Singapore will continue to offer Citi’s full breadth and depth of services to our clients including being one of four wealth hubs globally.” BLOOMBERG
The company will now operate five main businesses and eliminate the three regional chiefs who oversee operations in about 160 countries around the world, according to a statement on Wednesday. At least four of Ms Fraser’s senior deputies got new roles in the shake-up, and the firm is looking for a head of banking, which includes oversight of the investment-banking unit.
The moves will result in a number of job cuts in Citigroup’s back-office functions. The company does not yet have firm targets for how many employees will be affected, according to people familiar with the matter.
“We have taken hard, consequential, tough decisions here,” Ms Fraser told investors at a conference. “They are not going to be universally popular within our bank. It’s going to make some of our people very uncomfortable. I am absolutely fine with that.”
Citigroup shares fell 1.7 per cent on Wednesday. Still, the stock is down roughly 40 per cent since Ms Fraser took over in early 2021, more than double the decline of any major US rival in that period.
Five businesses
The firm is scrapping its two long-time core operating units, one of which focused on institutional clients while the other housed the firm’s consumer offerings.
Citigroup will instead now have five main operating units, including a services unit led by Mr Shahmir Khaliq, a trading division headed by Mr Andy Morton and a US personal-banking division under Mr Gonzalo Luchetti. Mr Peter Babej will lead the banking division on an interim basis, while Mr Andy Sieg is set to join later in September from Bank of America to lead Citigroup’s wealth offerings.
All five men will be on Ms Fraser’s executive management team, which will expand to 19 people. That includes Mr Ernesto Torres Cantu as head of international, while Mr Sunil Garg continues to lead North America.
“This should help reduce the fiefdoms that have plagued the firm in lieu of greater coordination,” said Mr Mike Mayo, an analyst at Wells Fargo & Co. “The risk for this type of move is always undesired departures and internal strife, especially with Citi’s history.”
Back-office functions
Ms Fraser said her moves on Wednesday were motivated, in part, by a desire to hold managers more accountable in her push to improve Citigroup’s returns, which have long lagged behind peers.
To that end, she said, the firm has eliminated most of the co-heads it previously had running some of its largest and most important businesses.
“While I’m confident that the steps we’re taking will simplify the organisation and improve our competitiveness, they will result in people changing roles or leaving our firm,” Ms Fraser said in a memo to staff. “The scope of some roles has been intentionally changed to free up our producers and dealmakers to focus more of their time on clients and drive our results.”
Citigroup has seen its headcount swell to 240,000 in recent years as it hired a bevy of engineers, consultants and other compliance workers. With its upcoming push to slash staffing levels, the bank will evaluate the tens of thousands of workers it has dedicated to back-office functions such as finance, human resources, operations and technology.
That is because many of those workers’ roles were tied to a certain region, the former institutional clients group or the personal banking and wealth management division.
When contacted by The Straits Times, a Citi Singapore spokesperson said on Thursday: “Singapore, where Citi has operated in for over 120 years, remains an important hub.
“Singapore will continue to offer Citi’s full breadth and depth of services to our clients including being one of four wealth hubs globally.” BLOOMBERG
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