Goldman Sachs Tries To Diversify Revenue Centers As Economy Wobbles

Goldman Sachs is going through a big transformation under David Solomon, the bank's CEO since 2018, who famously moonlights as an electronic dance music DJ, Business Insider reported.

Photo Insert: David Solomon took over in 2018 from long-running CEO LLoyd Blankfein, which has resulted in a new center of gravity when it comes to the power dynamics there.

The investment banking powerhouse is trying to diversify its revenue by pushing into new businesses like consumer banking, credit cards, and wealth management. Goldman is also diversifying its physical footprint, opening offices in locations far from the New York City skyline, including Dallas, Tex., and West Palm Beach, Fla.

The effort is not without obstacles, however, and Solomon's greatest challenge right now appears to balancing growth with declining revenues.

The cost of running the bank's money-losing consumer bank Marcus, for example, has become a lightning-rod issue internally, forcing Solomon to consider switching gears.

The potential pivot comes as the bank aims to cut staff this year for the first time since the pandemic hit. Wall Street in general is on track for a precipitous decline in M&A and IPOs dealmaking, thanks to rising interest rates and a general economic slowdown.

Solomon took over in 2018 from long-running CEO LLoyd Blankfein, which has resulted in a new center of gravity when it comes to the power dynamics there. Goldman in 2020 created a standalone consumer division that includes its Marcus lending unit as well as its wealth-management and private-banking businesses.

Goldman now has four divisions: consumer and wealth management, asset management, investment banking, and global markets.

The new setup matches the way Goldman reports financial results, a change the firm made in 2019 to better align with how Solomon wanted investors to think about the firm. Stephanie Cohen, who was tapped to lead the consumer bank along with Tucker York, had long been considered a rising star at the bank.

But in the face of recent questions over Goldman's spending on the money-losing strategy, John Waldron, Goldman's president, and Solomon's longtime lieutenant, has taken a more hands-on role. Another Goldman rising star is Julian Salisbury, a soft-spoken Englishman, runs the bank's growing asset management business.

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