As you may have heard, Wall Street is set to lay off thousands upon thousands of financial services employees over the next several months. This is truly saddening and our condolences go out to those who will be without work for whoever knows how long. Having said that, one thing we constantly hear complaints about is the insult to injury process that is an HR-administered lay off. You’re brought into a conference room, you’re told how valuable you are but at this time don’t fit into the bottom line blah blah blah, someone passes out tissues and you’re asked if you’d like your belongings boxed up and shipped to your home or if you’d like to clear out your desk yourself but either way you need to be gone within the hour, possibly escorted to the door by security. The whole thing is demeaning and downright insulting. Which is why, we’ve always wondered, if your firm is laying off scores of people regardless and you might be one of the unlucky ones anyway, shouldn’t they come up with a better way of letting you go? One that appeals to your competitive instincts and your zest for a good bet? One in which you could make some money and have some fun? Something, perhaps, like this? Read more »
Earlier this month, Bank of America announced that it’d be laying off 30,000 employees, as part of a program designed to help the firm make/not lose money called Project New BAC. It’s not that Brian Moynihan et al wanted to let these people go, but thanks to decisions by his predecessors including but not limited to funding Ken Lewis’s Boone’s of the Month Club and paying $4.1 billion to find out what it feels like to be violated by Angelo Mozilo, it’d become more than a little necessary. Lest there be any confusion, the 13 members of BAC’s industrials group who were axed this afternoon did not fall under the “because we have to” but rather the “because we feel like it” category on Bri-Moy’s master spreadsheet. Sayeth Bloomberg: Read more »
Cuts apparently continued at Moyhinan’s House of Fun yesterday. Read more »
For the last two weeks we’ve been hearing rumors of layoffs at Lehman. Last week people at Lehman were saying that layoffs were expected to come this week, before the Labor Day holiday. Now Bloomberg is reporting that “people familiar with the matter” estimate that Lehman will cut as many as 1,000 jobs. The good news is that Bloomberg’s sources say the Lehmanites will hold on to their jobs for a little longer, at least until Lehman announces its third-quarter financial results.
Why would Lehman hold off? We’re told that Lehman is afraid of sending out signals about the size of its losses ahead of the third-quarter financials. The idea is that if the layoffs cut deeper than expected, investors may assume that they reflect bigger than expected losses. Better to announce the news all at once.
Update: The New York Times says 1500 employees, or nearly 6 percent of its work force, will get the axe before the third-quarter results are in.
Lehman Said to Be Poised to Eliminate as Many as 1,000 Jobs [Bloomberg]
Even as Wall Street’s storied investment houses struggle to get back on their feet, cost-cutting and layoffs may be hurting their ability to recover quickly from financial turmoil. Many of the best and the brightest have already seen the writing on the wall and lit out for brighter territory, while those left behind may be so demoralized they are underperforming while awaiting another round of expected layoffs.
In a story in the City section of the Times on Sunday (you might have missed it because that section doesn’t get delivered to the Hamptons, where you have to read the Long Island news instead), former UBS mortgage analyst Andrew Slutsky explains the problem. “People were like, ‘Why bother working if I know I’m getting laid off?'” Slutzky says. “You remember senior week of high school? You don’t really do anything. You just kind of hang out. We’d reminisce about the boom days.”
Reminiscing is not a trading strategy, and Andrew is not the first person from whom we’ve heard this description. If Wall Street’s boom times are dominated by men acting on “animal spirits,” these days (to paraphrase Bruce Springsteen), many Wall Streeters have ended up like a dog that’s been beat too much.
Things are so bad that many aren’t sure whether it’s worse to keep a job or lose one. “The funny thing about getting laid off, having worked in this doom-and-gloom environment for the past couple of years, is that you don’t know who the winners and the losers are,” Andrew says.
(As an aside: Thanks for shout-out, man. Drop us a line if you want to write more about your life after the layoff.)
Wall Street Blues [New York Times]
No one on Wall Street believes the official economic data anymore. Jobless number, spending numbers and job creation numbers are consistently revised in ways that show economic reality to be more gruesome than the original numbers showed. Inflation seems to be calculated according a formula that nets out anything with higher prices.
And now comes the new that from the U.S. Bureau of Labor Statistics that total headcount on Wall Street was flat over the past 12 months. That will be shocking news to the thousands of Wall Street workers who saw their jobs cut over the past year. Even data from private-sector analysts seems to undercount the bloodletting, showing that, on a seasonally adjusted basis, employment has declined by only 800 since the end of 2007.
So what happened to all those job losses? The answer after the jump, along with the real numbers.
Bloomberg sums up the total job losses from recent rounds of layoffs. The report comes with bad news and worse news. The bad news is that the job cuts add up to 3.3 percent of employees at 28 firms. The worse news: more are on the way.
That’s significantly less than the market slump from 2000 to 2003, when 17 percent of banking and securities jobs in New York were wiped out, data from the Bureau of Labor Statistics show. Given the record-breaking losses of the past year — banks and brokers have taken $383 billion of writedowns and credit losses — some economic forecasters and industry veterans expect the number of dismissals to increase.
We’re told that layoffs began yesterday in the structured leverage finance group at JP Morgan. Yesterday heads rolled among the senior staff. Today junior people are feeling the axe-man’s blade, according to a source familiar with the matter.