Three mid-level bankers from Goldman Sachs’ technology investment banking group have left in recent months to join Uber, reports Reuters.
The bank, which was one of Uber’s first corporate backers alongside other institutional investors such as Fidelity Investments, Google Ventures and BlackRock, has always had a close relationship with the taxi app and only last year, according to Reuters, Uber hired Goldman Sachs’ wealth management team to raise funds from the bank’s high net-worth clients.
Although the bank does not disclose attrition figures it has lost a number of employees to start-ups and private equity firms in recent years and earlier this month, announced a series of initiatives designed to retain more junior level employees, including offering faster promotions at analyst and associate level and faster global rotations.
Reuters reports that the move to Uber by the bankers is the latest in a series of departures from Wall Street banks to Silicon Valley start-ups, which offer employees flexible hours, innovative and collaborative working environments and share and stock options, in comparison to the often long hours and competitive environments the banking industry is notorious for providing.
“We hire a lot of young people,” David Solomon, co-head of Goldman’s investment-banking division, told The Wall Street Journal. “We don’t need 100 per cent of them to decide they want to spend their whole careers at Goldman Sachs… we need a percentage of them to.”
Despite the reported pay cut that employees are taking to join start-ups – a vice president in investment banking can make up to £331,000 in comparison to the £132,400 a mid-level employee at Uber is estimated to earn, there have been a number of high profile exits recently such as Ruth Porat, former chief financial officer at Morgan Stanley who left for a similar role at Google Parent company Alphabet this year.
Earlier this year Bloomberg also reported that more bankers are leaving their finance positions for zero-salary technology jobs, due to investment firms such as UBS, RBS and Deutsche Bank AG condensing lines of business, especially within debt trading, which has prompted former bankers to quit finance and put their experience into use in financial technology.
Joining traditional investment banks was previously the route that many students at Harvard, for example, were expected to take a few years ago, however, Reuters reports that the number of graduates going into investment banking and sales has decreased to 5 per cent, from 10 percent in 201, and 20 per cent of the graduating students from the class of 2015 said they will be taking jobs at technology companies, a figure which is up from 11 per cent in the same period.