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New York City-based mega investment banking firm Goldman Sachs has asked some of its managers to relocate from major hubs — like its downtown Manhattan headquarters or a major location in London — to less expensive emerging locations like Salt Lake City or Dallas. The alternative is to lose their jobs, according to a report from Bloomberg News.
The investment bank is shipping its managers to growing locales to help develop talent pipelines in regions where the company is growing, thanks to the efforts of mainly junior-ranking employees, the report said. But the move, internally nicknamed “Project Voyage,” is part of Goldman Sachs’ latest cost-cutting initiative.
“The push aims to drive down costs and tap a pipeline of talent emerging in these regions,” Bloomberg reported. “The firm is also seeking to build out more functions and roles in these growing offices whose rise has been fueled by junior-ranking employees, often in middle- and back-office functions.”
Moving managers to Salt Lake City and Dallas will allow the bank to capitalize on the wildly different cost of office space. The cost of renting a commercial office building in Manhattan is about $80 per square foot, compared to around $26 per square foot for Salt Lake City and Dallas. In more expensive parts of New York City where Goldman has offices, rents soar to over $100 per square foot.
In 2000, Goldman Sachs opened its first office near the University of Utah in Salt Lake City. The office was initially staffed to provide service and technology support for the firm’s newly launched online platform for private wealth clients. Over the next two decades, the office grew and diversified to become one of the firm’s largest and strategically important locations and one of the largest private employers in Salt Lake City, with close to 3,000 workers. The office will now grow further to accommodate the moving managers.
Living and working outside of major cities also provides employees more value to their paychecks. New York City’s cost of living is 130 percent higher than the national average, with a median rent of $7,749 per month, according to financial website Payscale. Salt Lake City’s overall cost of living is only 10 percent higher than average, with a median rent of $1,844 per month. Rent in Dallas comes in at around $1,500 per month.
As part of Project Voyage, Goldman Sachs is also cutting around 3 percent to 5 percent of its nearly 50,000 employees. The banks division heads are currently determining who to cut and who to relocate.
