Goldman Sachs Severance Package 2026: The MD-vs-VP Split Decoded

Goldman Sachs Severance Runs on Two Parallel Tracks

Goldman Sachs is unusual among US investment banks in operating two effectively separate severance regimes. Analyst through vice-president level employees fall under a formula-driven plan that mirrors industry standard practice. Managing directors and partners do not — their separations are negotiated individually under different governance, with terms that reflect each individual’s compensation history, role, deferred bonus position, and equity stack.

The split matters because most reporting on Goldman severance conflates the two, producing averages that misrepresent both populations. A typical analyst laid off in good standing receives a package that is roughly predictable to within a few weeks of pay. A typical MD laid off in similar circumstances receives a package whose total value is determined by what survived the negotiation — and that negotiation can move the number by an order of magnitude.

This article covers both tracks. The formula track is documented in plan summaries that have surfaced in court filings and through public SEC disclosures. The MD track is reconstructed from industry reporting, employment-litigation records, and the patterns Goldman departures consistently surface in subsequent discrimination and breach-of-contract suits.

Project Voyage: The 2024-2027 Cost-Out Program

The current cycle of Goldman layoffs runs under an internal codename — Project Voyage — that surfaced publicly in Bloomberg and Fortune coverage of the Q4 2025 earnings call. CEO David Solomon launched the program in Q4 2024 as a three-year initiative to remove approximately $1.3 billion in operating costs by 2027. The program runs on three levers simultaneously:

Relocation to Dallas and Salt Lake City. Goldman is shifting roles out of high-cost NYC to lower-cost regional centers. Managers received a blunt March 2025 ultimatum surfaced in Bloomberg’s coverage: “move to Dallas or Salt Lake City, or leave.” For employees with NY-anchored personal lives, the relocation ask functions as a soft layoff. Affected refusers should classify their departure as an INVOLUNTARY termination for severance purposes — not voluntary resignation — and document this classification in writing.

Rolling performance-based layoffs. The annual Strategic Resource Assessment (SRA), which had cut approximately 3-5% of staff each year for over a decade, is being replaced with continuous performance-tagged exits. The shift removes the predictable annual cull rhythm and creates ongoing uncertainty across the year. The March 2025 SRA round targeted approximately 1,395 jobs (~3% of the ~46,500 global workforce), concentrated on VPs with poor reviews — Solomon publicly framed this as “too many VPs.”

AI and offshoring to Bengaluru. Specific roles in operations, engineering, and analytical support are being moved offshore or eliminated entirely via AI tooling. The bank has not published headcount targets for this lever publicly, but ProspectRock Partners and PYMNTS analyses estimate substantial cuts in NY and other US locations during 2026. The January 2026 wave hit roughly 400 positions initially with estimated 1,000-3,000+ over the full year.

Cumulative cuts since Project Voyage launched in Q4 2024: more than 5,000 across Q4 2024 (~1,500), March 2025 (~1,395), the March 2025 NY WARN (343), and the January 2026 wave. Fraser-equivalent codename messaging at Citi (Project Bora Bora) is publicly more visible, but Goldman’s Voyage is structurally larger as a percentage of base.

The Formula Track: Analysts Through Vice Presidents

For non-executive employees laid off in good standing, Goldman’s standard severance follows a tenure-based accrual familiar to anyone who has worked through a US bank layoff cycle.

The cited structure is:

• Base: approximately 2 weeks of base salary
• Accrual: 2 additional weeks of base salary per completed year of service
• Typical range: 4–26 weeks total for non-executive separations

The formula is not publicly published as a single document. It surfaces through plan amendments, separation-agreement standard language that has appeared in litigation, and through internal HR guidance documents referenced in employment-discrimination cases filed against Goldman over the past decade. The accrual sometimes varies by division — investment banking, asset management, global markets, and platform services have historically applied minor variations, particularly around how the dollar value of “pay” is calculated for high-base-salary employees.

The 2023 round of approximately 3,200 layoffs — the largest at Goldman since 2008 — applied the formula uniformly to affected non-executive staff. Subsequent rounds in 2024 and 2025-2026 followed the same pattern, though with increased emphasis on individually-negotiated terms for senior VPs in revenue-producing roles.

The bonus exclusion problem. The single largest financial gap in a standard Goldman severance package is the bonus exclusion. Banker compensation is structured with low base salary relative to total compensation — an analyst on $110,000 base typically earns $200,000-$230,000 total in a normal year. The bonus is the majority of the compensation. The standard Goldman severance does not include bonus by default. Affected employees lose the prior calendar year’s bonus accrual entirely if separated before the payout date (typically late January or early February). For a Q4-cut employee, this is often the single largest dollar item missing from the offer — substantially more than the cash severance itself. Bonus proration based on time worked in the accrual year is the cleanest single negotiation ask, and Fortune’s January 2023 coverage documented this as the #1 unresolved grievance from the mass-cut event.

The PTO carryover elimination. Goldman eliminated PTO carryover in spring 2022. Accrued unused vacation is now forfeited on the layoff date if not used beforehand. Affected employees should use their PTO balance BEFORE any expected separation date.

Worked Examples by Tenure

The table below shows what the formula pays at each tier, assuming the employee qualifies as a non-executive separated in good standing.

Tenure	Weeks under formula	Typical base-only pay range
1 year	4 weeks	$9,000 – $25,000
3 years	8 weeks	$18,000 – $50,000
5 years	12 weeks	$27,000 – $75,000
8 years	18 weeks	$40,000 – $115,000
12 years	26 weeks	$60,000 – $170,000

Ranges reflect typical base salaries across operations, technology, and middle-office roles in major US offices. Front-office investment banking and global markets base salaries push significantly higher — a vice president in investment banking with a $250,000 base would receive roughly $115,000 at 8 years of tenure under the formula alone, before any additional negotiation. The figures do not include unvested RSU treatment, deferred bonus continuation, or the extended COBRA subsidies that typically appear alongside formula severance.

The formula numbers should be read as ballpark figures. Actual packages vary based on division, the specifics of how “pay” is defined in the relevant plan document, whether the separation falls within a designated workforce-reduction window, and whether the employee has any active discrimination, retaliation, or FMLA-related concerns that trigger enhanced packages through counsel.

The MD-and-Partner Track: Individually Negotiated

Managing directors and partners do not receive formula severance. Their separations are individually negotiated under a different governance framework — typically involving the relevant divisional head, the firm’s compensation committee, and the employee’s own counsel.

The negotiation centers on five components:

1. Cash severance. Often expressed as months of base salary, but the multiplier varies substantially by tenure, role, and the strategic value of a clean separation. Reported MD packages have ranged from 6 to 24 months of base salary, with outliers in both directions tied to specific circumstances.

2. Deferred bonus accrual. Goldman defers a substantial portion of annual bonuses for senior staff over multi-year vesting schedules. MD severance negotiations frequently determine which deferred tranches continue to pay out and which forfeit. The dollar value here often exceeds the cash severance component.

3. Unvested RSU treatment. Standard MD employment terms include multi-year RSU grants subject to time and performance vesting. Severance negotiations determine whether unvested grants continue on schedule, accelerate at separation, or forfeit entirely. The treatment varies by grant agreement and by the leaver-status determination.

4. Non-compete and non-solicit terms. Goldman has historically imposed 60-day to 12-month non-compete restrictions on MDs in revenue-producing roles. The duration, scope (which competitors are restricted), and consideration paid during the non-compete period are all negotiable points. A shortened non-compete is often worth more than additional cash severance for an MD with a likely landing spot at a competitor.

5. Release-of-claims language. The breadth of the release — which claims the employee waives in exchange for the package — is the most contested clause in any MD separation. Releases that specifically include or exclude age, sex, race, retaliation, and equal-pay claims have surfaced in subsequent litigation when the scope was contested.

The negotiation typically takes 4-12 weeks. MDs who decline the initial package and engage counsel often see total compensation improve by 15-40%, particularly when there are documented concerns around protected-class treatment or deferred bonus calculations.

The 2.99x executive cap. Goldman’s board adopted an Executive Officer Cash Severance Policy on January 17, 2024 that caps cash severance for any new Section 16 officer agreement at 2.99 times base salary plus target bonus without stockholder ratification. Equity, retirement benefits, COBRA, outplacement, and accrued vacation are explicitly excluded from the 2.99x cap. The policy applies to executive officers; MD-level packages below Section 16 remain governed by the discretionary negotiation framework above. The 2.99x cap is the structural ceiling on new executive arrangements; MDs negotiating today should know it exists even though it doesn’t directly bind their tier.

RSU Treatment: Good Leaver vs Bad Leaver

The single most important variable in any Goldman severance — at any level — is the “leaver status” determination on unvested equity and deferred awards.

Good leaver status applies to:

• Workforce reduction separations
• Mutual-agreement departures
• Retirement at or above the firm’s designated retirement age
• Separation due to disability or death (with the relevant beneficiary rules)
• Certain reorganization-driven departures

Under good leaver treatment, unvested RSUs typically continue vesting on their original schedule with no acceleration. Deferred bonus awards continue to pay out per their original deferral terms. The employee can, in many cases, continue holding the unvested equity for years after separation — a critical detail for senior staff whose unvested portion frequently exceeds their cash severance.

Bad leaver status applies to:

• Terminations for cause (misconduct, policy violations, regulatory issues)
• Voluntary resignation outside of designated retirement or transition windows
• Departures that violate non-compete, non-solicit, or confidentiality clauses
• Subsequent breaches that retroactively re-classify the separation

Bad leaver triggers forfeiture of unvested equity and deferred bonuses, often with clawback provisions reaching back several years. The leaver-status determination is documented in plan administration records and can be contested through internal appeals processes — but the burden of proof falls on the departing employee, which makes the original separation agreement language load-bearing.

The leaver-status framework is more favorable at Goldman than the equivalent at several competitor banks, particularly for non-executive employees laid off in workforce reductions. The downside is that the bad-leaver triggers are broader, and post-separation conduct (joining a competitor too soon, soliciting clients) can retroactively flip the status.

Tax Mechanics: Federal Plus Stacked State Withholding

Severance is treated as supplemental wages under IRS Publication 15-A, which applies a flat 22% federal withholding rate on payments under $1 million in a calendar year. Amounts above $1 million face 37% federal withholding on the excess — relevant for partner-level separations and MDs with large bonus-deferral payouts in a single year.

The federal supplemental rate is not a final tax rate. Actual federal tax owed is reconciled at filing time based on the year’s total income and standard tax brackets per IRS Publication 525. A separation early in the year typically over-withholds; a separation late in the year with a large lump-sum payment often under-withholds and triggers a balance owed at filing.

For New York-based employees — which covers the majority of Goldman’s US workforce — state and city withholding stacks on top per New York State Department of Taxation supplemental wage guidance:

• New York State supplemental withholding: 11.7% for high earners
• New York City supplemental withholding: 4.25% for residents earning above the top bracket
• Combined effective stack: roughly 38% federal + state + city for typical VP-level separations
• Plus FICA: Social Security (6.2% to the annual wage base) and Medicare (1.45%, plus 0.9% additional on income above $200,000)

A formula-driven 16-week severance for a VP with a $200,000 base — roughly $61,500 gross — would see approximately $13,500 in federal withholding, $7,200 in state and city, plus FICA, leaving roughly $40,000 net before any benefits costs. The reconciliation at filing depends on the year’s total compensation including any partial-year bonus that arrived before separation.

Negotiation Leverage at Goldman

For formula-eligible staff, negotiation leverage rarely moves the base formula. The bank applies the structure consistently to avoid age and protected-class discrimination claims arising from uneven treatment. Where leverage does appear:

Extended COBRA subsidies. Standard packages include 60 days of employer-subsidized COBRA continuation. Extensions to 6 months or 12 months are routinely negotiable, particularly for employees with documented family healthcare needs or those over 50 facing longer expected job searches.

Outplacement upgrades. Standard packages route through group outplacement programs. Individual one-on-one coaching with a senior career advisor is a frequent negotiation outcome, particularly for VPs.

Non-compete narrowing. The default non-compete typically restricts work at named competitor firms for 60-180 days. Narrowing the scope (specific desks rather than entire competitor firms) or shortening the duration is a meaningful concession.

RSU vesting on specific tranches. While the full equity stack rarely accelerates, individual tranches with near-term vest dates sometimes accelerate as part of negotiated packages — particularly when the separation date falls within 30-60 days of a scheduled vest.

Release-of-claims scope. Carving out specific potential claims from the release (age discrimination claims under the ADEA, retaliation claims, equal-pay claims) materially changes what the employee can do post-separation. Counsel typically negotiates this heavily for any senior departure.

The Chen-Oster disparate-impact lens. Goldman settled the gender-discrimination class action Chen-Oster v. Goldman Sachs for $215 million in 2023, covering approximately 2,800 women across the firm. The plaintiff firm Sanford Heisler Sharp continues to investigate Goldman layoffs for disparate impact on protected classes. For affected employees who are women, employees over 40, or members of other protected classes, the standard release of claims should be reviewed by counsel before signing — particularly if the layoff cohort skews demographically or if the employee has any documented complaint history. Protected-class affected employees often have leverage that becomes invisible if the release is signed without that lens applied.

For MD-level separations, the entire package is negotiable and the leverage points are different. The most consequential clauses are typically the leaver-status determination on deferred awards, the non-compete duration (since it determines competitive optionality), and the release-of-claims scope.

How Goldman Severance Compares to Other Banks

The formula at Goldman Sachs is broadly similar to the JPMorgan severance package — 2 weeks of base plus 2 weeks per year of service is industry-standard practice across major US banks. The differences sit in the surrounding terms: Goldman’s good-leaver framework for RSU treatment is generally more favorable than JPMorgan’s equivalent for non-executive separations, while JPMorgan’s hard 52-week / $400,000 cap is more publicly documented than Goldman’s caps.

Both banks tend toward longer non-compete restrictions than equivalent tech companies (compare with the Meta severance package or Amazon severance package, where non-compete clauses are typically limited to 30-90 days for non-engineering roles). The longer Wall Street non-competes reflect both the historical norms of the industry and the regulatory specifics of broker-dealer client relationships.

For employees considering whether their offered package is fair given their role, tenure, and the circumstances of separation, working with counsel familiar with US bank severance practice — or running the package through a comparative tool — surfaces specific anchor points faster than reading firm policy alone. Consider consulting an employment attorney licensed in your state, particularly for any separation involving deferred compensation, equity, or restrictive covenants.

What’s Worth Tracking After Separation

For laid-off Goldman employees, three post-separation items frequently produce avoidable problems:

1. Unemployment timing. Severance paid as salary continuation in New York delays unemployment eligibility for the period it represents. Lump-sum severance treatment is more favorable for unemployment timing but worse for tax bracket management. The choice between continuation and lump-sum is sometimes negotiable.

2. Non-compete consideration. Many states require that non-competes be supported by adequate consideration. The severance package frequently serves this function, which means accepting the package can lock in the non-compete enforceability that might otherwise have been disputable.

3. Reconciliation at tax filing. The 22% federal supplemental withholding rate is rarely the correct rate for a Goldman separation. High earners typically owe additional federal tax at filing; staff separated early in the year often over-withhold and receive refunds. Planning around this is worth doing before signing if the timing is flexible.

For all of these, the actual answer depends on specific dates, payroll mechanics, and state rules. The structural picture is what this article aims to provide — the actual numbers and timing in any individual separation need to be checked against the specific separation agreement.

Readers comparing their Goldman Sachs offer against the formula or thinking through MD-level negotiation can run a free severance fairness check at SeveranceCalc.com to see how their package compares against industry norms — or work through the full assessment if the situation involves equity, deferred compensation, or any protected-class concerns.