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 »
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.
From the files of the “maybe we never should’ve gotten into this in the first place” department: the RMBS group at the S&P has supposedly informed the would-be incoming Associate MBA class that their services are no longer required. Additionally, a “bunch” of research assistants, “some” MDs and one director have been downgraded from “career watch negative” to “dismissed.”
CEO John Mack has reportedly been given the boot.
Another round of layoffs at UBS is underway today, according to a person familiar with the situation. The asset management and wealth management units are said to be on the chopping block. Investment banking is also expecting cuts.
Oddly enough, the municipal bond unit, which is reportedly set to be shuttered by UBS, has been asked to “hold on” as the bank attempts to see if there are any buyers for the business, according to our source.
UBS could not immediately be reached for comment on the job cuts.
It’s a story that’s now all too familiar. A young Wall Street hopeful begins a promising career only to find that its been cut short by a sinking economy and Wall Street losses. Here’s how Jeffrey Martz begins telling his story to the readers of the New York Times business section.
On Monday, Nov. 5, the New York press reported that a prestigious Wall Street house — that happened to be my employer — intended to lay off two-thirds of its investment banking staff of about 120. Since I was one of the last people to arrive and because big corporations tend to handle their personnel by the last-in-first-out method, it occurred to me that I would be smart to stand near the elevator. This prediction turned out to be accurate and on Wednesday, Nov. 7, my successful, but truncated Wall Street career of 61 days — including three working Sundays — came to an end.
Martz explains how he was fired by the head of the financial strategies group, who refused to look him in the eye until they shook hands for the final farewell. And from that moment on he saw not one of his supervisors nor any the folks who had recruited him to the firm, except for one accidental encounter as he packed up his belongings.
Martz, however, was fired not on Wednesday, November 7, 2007. He was fired on Wednesday, November 7, 1990. We found the story deep in the archives of the New York Times business section. It’s somewhat heartening to remember that we’ve been through all this before. What would be even more encouraging would be if we could find out what ever happened to the then-young Martz. But after extensive investigation, we haven’t found the guy. Anyone know where Martz is?*
*We’re hoping he Googles himself frequently enough to find out that his story is once again being told. Hey, Martz, get in touch. firstname.lastname@example.org.
My 61-Day Career on Wall Street [New York Times]