Company Overview

News about Goldman Sachs has been hard to miss since 2006. The firm had a record year: Net revenue increased 49 percent, profit was up 93 percent, and the monster bonuses it paid out spawned dozens of articles in business publications. Then, in 2007, the global investment and securities firm managed to avoid any major write-downs unlike Wall Street neighbors hit hard by the sub-prime mortgage crisis. Goldman Sachs reported record net revenues of $45.99 billion for the 2007 fiscal year, with its investment banking sector pulling in $7.56 billion, 34 percent higher than in 2006. But the company isn’t totally clear of subprime-related headaches: It reported receiving requests for information from governmental agencies and self-regulatory organizations on several complex financial assets backed by the mortgages.

Goldman Sachs was founded in 1869 when Marcus Goldman, an immigrant from Europe, began a small enterprise to provide an alternative to expensive bank credit. In the 1950s Goldman Sachs played a lead role in establishing the municipal bond market, and in the 1970s the firm formed the first official M&A and real estate departments on Wall Street. In 1999, it became the last bulge-bracket bank to go public, raising $3.7 billion in the process. Today Goldman Sachs is the most prestigious American name in I-banking and is known for its cult-like corporate culture. (The firm even has an online network of alumni, so current and former employees can stay in touch; 10,000 people have already registered.) This atmosphere translates into results: Goldman Sachs is consistently profitable and at or near the top of the I-banking league tables. Particular industry strengths are in telecommunications, financial services, energy, technology, and health care. T

he firm is rapidly globalizing. In China, for instance, it has a joint venture, Goldman Sachs Gaohua, with a Chinese bank. The efforts in China are paying off; Goldman has been involved in underwriting a series of big securities issuances among Chinese companies in recent years and is currently lead-managing the Bank of China’s IPO. Goldman has offices in Chicago, Frankfurt, Hong Kong, London, Milan, Paris, Sydney, Tokyo, and Zurich, among others.

Despite its reputation for secrecy, the firm has been publicly lauded for its workplace. MBAs perennially rank Goldman Sachs as one of the most desired places to work, and it’s foremost among financial services firms. Once in the door, people still love the firm; for the ninth straight year Goldman Sachs made Fortune’s ranking of the “100 Best Companies to Work For”—in no small part due to its high percentage of minority and female staff, its generous outreach efforts to ensure employee well-being, and things like 360-degree performance reviews, which mean that managers are evaluated by their subordinates. (The monster compensation packages don’t hurt, either.) However, without the carrot of an ownership stake in the firm since the bank went public, Goldman employees are much more likely to leave the firm for other offers than they once were.

Goldman Sachs used to think of itself as “long-term greedy,” says one partner, in that it would gladly pass on short-term profits to cement client relationships that would lead to substantial future income. Indeed, when the bank went public in 1999, it said it planned to stabilize earnings by focusing on fee-generating businesses like I-banking and asset management. However, the main driver for the firm’s growth in recent times has been trading, in particular proprietary trading. Although it doesn’t divulge its recruiting forecast, Goldman reduced its workforce by more than 14 percent in 2006. The firm focuses its on-campus efforts on the top ten graduate and undergraduate schools. The firm also recruits at Howard University and Spelman College, among other sources. “If you want to be with the best in the business, your resume is golden, and you don’t mind marching in step with like-minded colleagues, Goldman Sachs could be just right for you,” says an insider. “It is more straitlaced and rule-bound, but it’s a good fit for people who work to promote the firm rather than the individual.” Another insider points to the limitless opportunities after getting Goldman on your resume: “Once you’re a second-year analyst, you’ll receive lots of offers from hedge funds and other places.”

Many Goldman Sachs alumni go on to important roles elsewhere in business, government and other fields. For example, CEO Henry Paulson left the firm in July 2006 to become the U.S. Secretary of the Treasury, former CEO Jon Corzine is governor of New Jersey, and former CEO John Thain is CEO of the New York Stock Exchange. This isn’t lost on Goldman Sachs and is reflected in its recruiting practices. While academic background is critical, the firm wants smart and aggressive candidates who are mature and polished. One insider says that not having the right pedigree can hurt you at the firm.

“People here are very bright, but unfortunately they can also be quite arrogant, although it’s subtle and no one would admit it underlies the organization," another insider said. "Goldman is trying to do more to diversify its workforce through senior management, but you get a sense it hasn’t trickled down yet.”

Fitting in is especially important—the firm does an impressive job of recruiting people who subscribe willingly to the Goldman way. Insiders say that the firm likes to hire people with poise who have cultivated interests in art, history, and philosophy, in addition to current events. “People seem to be a little bit smarter and snappier here,” says an insider.

Another insider urges new hires to assert themselves: “You have to fight the constant put-downs and show them you’re not going to take it.” Training is intense and compared by some to “a brainwashing period,” but offers a fantastic opportunity to network internally at social events before being dropped into the behemoth bureaucracy. Goldman Sachs recruits undergraduates and MBAs for positions in trading and principal investments, I-banking, and asset management in the fall with intensive on-campus and onsite interviews; insiders report traveling to New York three to five times for follow-up interviews. The average candidate interviews with 10 to 20 people before getting a job offer, and any person who interviews you can disqualify you from the process. The first interview, on campus, is a “firmwide” interview, designed to scout your general suitability. Offers for full-time positions generally are sent in November and December; summer internship offers are made in February and March. If you make it past the first round, you might be invited to second-round interviews with up to two different divisions within the firm. Goldman plans to open its new world headquarters in Lower Manhattan’s Battery Park City in 2010. The building will house some 9,000 employees currently operating out of about ten different downtown locations.