Goldman Sachs' new PR chief and managing director, Richard Siewert, most likely decided to skip new-employee orientation after he read The New York Times this morning.
The paper included an op-ed titled "Why I Am Leaving Goldman Sachs," by 12-year derivatives executive Greg Smith. In the piece -- which has hundreds of comments by Times readers and has spread like wildfire on the web and through social media -- Mr. Smith explained that the reasons for his resignation included a "decline in the firm's moral fiber" and its irresponsible approach in working with clients.
"I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it," wrote Mr. Smith.
He highlighted what he says is Goldman's tendency, under CEO Lloyd C. Blankfein and President Gary D. Cohn, to rank profits above clients' well-being. "It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as 'muppets,' sometimes over internal e-mail," Mr. Smith wrote. "Goldman Sachs today has become too much about shortcuts and not enough about achievement. It just doesn't feel right to me anymore. I hope this can be a wake-up call to the board of directors."
The company's response to the allegations in the op-ed has been minimal. Goldman is parodied by countless Twitter handles and Facebook pages, but the bank has yet to use either its real Twitter handle or Facebook page. That makes it unlikely that Goldman will promote its side of the story on social media -- where its critics are most vocal.
In a sign the company may begin firing back, a spokeswoman told The Wall Street Journal: "We disagree with the views expressed, which we don't think reflect the way we run our business. In our view, we will only be successful if our clients are successful. This fundamental truth lies at the heart of how we conduct ourselves."
Mr. Siewert will certainly have his hands full outlining a long-term reputation strategy, as this op-ed is just one more blow against Goldman's embattled reputation. In 2010, the firm settled with the SEC following charges of security fraud, and Mr. Blankfein had received a storm of criticism in 2009 for telling the Times of London that he was doing "God's work."
The steep decline in the company's public standing led to a new marketing strategy from its creative shop, WPP's Y&R, that in the fall of 2010 began trying to associate Goldman Sachs with job creation.
Mr. Siewert will have to draw on his past experience. He was most recently counselor to the treasury secretary. He also served as VP-global communications and public strategy at Alcoa, and press secretary in the Clinton administration. He replaced longtime corporate communications chief Lucas van Praag, who was with Goldman for 12 years.
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