Trading Places
Inside views on the jobs market
Bank crunch hits end-of-year festivities – oh, and more jobs
Ahh, just when you could use a stiff drink on the company’s tab to kill the sobering mood wrought by this year’s financial carnage, you find out you’ll be coughing up for the bill yourself at the annual holiday shindig. Such is the case for scores of London’s financial workers. As Reuters’ Olesya Dmitracova reports, employees at some of the biggest names in town – Goldman Sachs, BNP Paribas, Barclays and so on – will be on the hook for their own year-end parties. A reasonable cost-cutting measure, it seems, during these often unreasonable times. Too bad, though, for those who get stuck drinking swill should their annual bonus get slashed too.
Across the pond, some employees of failed Washington Mutual received some less digestible news on Friday. JPMorgan, which bought WaMu’s banking operations in September, announced job cuts were on the way for some at the former thrift’s Seattle headquarters and elsewhere. Though overall numbers are still not known, and most will retain their jobs, at least 1,600 back-office WaMu staff who worked in California got word they’d be out of a job by March. More concrete figures and dates for others are expected on Monday. How’s that for a start to the holiday season?
Has the credit crunch hurt your end-of-year party plans?
from DealZone:
Bank dealmaking circus=recruiting bait?
Some in the financial industry apparently smell opportunity in the latest round of mergers and blood-letting among top banks.
Referring to the Wells Fargo takeover of Wachovia as the WWF and placing Bank of America CEO Ken Lewis atop a bucking Merrill Lynch bull are just a couple of the attention-getting devices financial sector recruiting firm RJ & Makay uses in its latest promotional You Tube video.
Branching out from a previous video aimed at Merrill Lynch brokers, the new “Billion Dollar Video” (the company claims assets from advisers brought to them via these viral recruiting tools represent billions of dollars) targets all financial advisers but specifically appeals to those currently at Merrill Lynch and Wachovia.
Those brokers are grappling with with the question of whether to accept a retention/transition package, move to another firm or go independent. RJ & Mackay is clearly hoping they'll opt to walk and chose the firm to advise them on where to go next.
The just over four-minute short could help at least get their attention. It's an equal opportunity stick poker, targeting all the big hits of this financial season. JP Morgan Chase, Bear Stearns, Fannie and Freddie are all in there along with Lehman, Buffett, Goldman, AIG, Morgan Stanley, Bernanke, Paulson, the government bailout, executive greed, executive kool-aide dispensers and dealing with those pesky gnats, known as recruiters.
Watch here:
Do the right thing
Goldman Sachs sent the business media abuzz this weekend with news that its top executives were voluntarily giving up their annual bonus in a gesture they hope will spread to the rest of the Street. The decision immediately won the praise of New York Attorney General Andrew Cuomo, who hailed the move as a “step in the right direction”, while the firm’s spokesperson said, “They believe it’s the right thing to do.”
But don’t expect any applause just yet, at least not from Main Street. Taxpayers around the globe are still fuming about their respective government’s multibillion dollar bank rescue schemes, prompting no shortage of snarky editorials pointing to bloated paycheques and bankers’ cavalier actions for the financial meltdown.
At a time when most bankers are holding on to their jobs by a string — just ask any Citigroup employee how they’re feeling these days — editorialists are quick to point out that bonuses are just that: a bonus.
“The truth is, most of them are lucky to have a job at all and they know it,” writes the Wall Street Journal’s William Cohan.
Perhaps UBS is taking note. The Swiss bank recently axed bonuses for top executives and said it would introduce a more transparent pay system, in a sign that banks are finally acting to quell the public’s mistrust of the bonus culture.
Are the recent moves to cut bankers’ pay an encouraging sign, or is the damage already done? Share your thoughts below
When it pays to take a break
Usually when a company announces dreaded plans to “cut costs” or “restructure”, it’s a sure sign a new batch of employees are about to be axed. But in a refreshing new take on saving money in the corporate world, one company has decided to move in a decidedly unique direction.
The term is “career break“, a solution that Irish Life & Permanent’s banking division has come up with in a bid to slash costs, not jobs. The plan offers employees $25,000 to $45,140 to take a 2- or 3-year “break” from their jobs, thus cutting expenses without actually firing anyone. The company didn’t say how many employees are planning to accept the offer — nor did it mention whether said jobs would still exist after the “break” was over — but it hopes the plan will appeal to bankers looking for more flexibility in their careers.
Irish Life may be on to something — at the very least, it may prevent some nasty lawsuits. More and more financial firms are being legally targetted by disgruntled ex-employees seeking lost wages and benefits, lawyers say.
Granted, most firms are still taking the old-fashioned approach to cost-cutting. Sources say Goldman Sachs — already on a firing streak in recent weeks — is planning to cut another 10 percent of its investment bankers in Tokyo. In Russia, the recent rash of deep job cuts prompted one banker to say, “The best bonus you can have in Moscow right now is to have a job at all.”
And there’s more on the way. As nervous investors yank money out of their investments, mutual fund companies are bracing for the next hit. Experts say job losses at U.S. asset managers could rival layoffs in the last big bear markets of 2001-02 and 1991-92.
Kind of makes a “career break” sound appealing.
A cash incentive for a career break sounds like a terrific idea. For many employers a shorter term, less expensive, option for a week or two off without pay would also be helpful. See my blog post, “Would your employees like an extra week off; without pay?” on http://www.allbusiness.com.
Job Bank – Nov.10
The following financial services industry appointments were announced on Nov.10, linked where possible to personal profiles on LinkedIn. To inform us of other job changes, please e-mail moves@thomsonreuters.com.
GOLDMAN SACHS GROUP INC
Goldman Sachs has identified the six equity analysts fired by the company. Ousted are William Tanona, who covered companies such as JPMorgan Chase & Co; Deane Dray, who followed Honeywell International Inc; Charles Chon; Ajay Kejriwal; Lawrence Keusch and Peter Wahlstrom.
GATEHOUSE BANK
A subsidiary of the Securities House of Kuwait appointed Zaid Maleh as director of its capital markets origination team. Maleh joined Gatehouse in September 2008 from Vienna-based Raiffeisen Zentralbank Osterreich AG (RZB), where he spent the last three years.
RBC CAPITAL MARKETS
Job Bank – Oct. 29
The following financial services industry appointment was announced on October 29, linked where possible to personal profiles on LinkedIn. To inform us of other job changes, please e-mail moves@thomsonreuters.com.
Goldman Sachs Goldman Sachs Group Inc on Wednesday promoted 94 employees to partner, the firm’s highest rank and one offering lucrative bonuses. Every two years, Goldman names a class of managing directors to the exclusive rank of “partner managing director.” The system offers about 400 employees the chance to share a fifth of the firm’s total compensation pool.
Credit Suisse Credit Suisse AG hired a former Lehman Brothers banker for a newly created investment banking position as it continues to refocus its business. Colin Welch will join the Swiss bank in November as head of investment banking for retail and luxury goods in Europe, Middle East and Africa, according to an internal memo provided by Credit Suisse. Welch headed retail investment banking for Europe and the Middle East at the collapsed Lehman.
Moody’s Corp Moody’s, parent of credit ratings agency Moody’s Investors Service, said Darrell Duffie was elected to its board of directors. Duffie, 54, is the Dean Witter Distinguished Professor of Finance at the Stanford Graduate School of Business.
MF Global Ltd
The futures and options broker appointed Bernard Dan, currently the chief operating officer, to replace Kevin Davis as chief executive.
Bracing for the pink slip epidemic
After a seemingly endless run of job cuts this week, Chrysler’s plan to slash a whopping 25 percent of its white-collar jobs handily goes to show how quickly problems in the finance sector leak into the rest of the economy.
Taken alongside cuts at Yahoo, Xerox and others, could this be the beginning of the so-called “pink slip epidemic”?
“When the dot-com and housing bubbles burst, it was easy to see what types of jobs would disappear. But these days as nervous lenders cower and credit contracts, virtually every industry is likely to be scathed in the widely predicted downturn,” writes Business Week‘s Moira Herbst.
The Wall Street Journal paints a similarly dire picture, noting that once-sheltered industries such as healthcare and technology are likely to feel the pinch, culminating in more job cuts and a steeper economic slump than most imagined.
But is that a bright spot? Breaking Views via the New York Times writes that Goldman Sachs’ plans to slash its headcount by 3,300 might not necessarily be a signal of doom. After all, Goldman managed to sidestep much of the credit damage that befell its peers, and its downsizing plans will bring it in line with rival Morgan Stanley. Is it just a simple game of catch up?
When bad things happen to bankers
Add 3,300 people to the long list of casualties of the credit crunch. Sources say Goldman Sachs plans to slash more than 10 percent of its workforce, a sobering sign of the times for a Wall Street stalwart that has largely dodged the massive credit losses that have taken out its peers. Once heralded as “tarnished, but not broken”, the latest round of job cuts will bring the bank’s headcount to the lowest level since 2006.
“These are not the last job cuts you will see,” warned Michael Williams, dean of Pepperdine University’s Graziado School of Business.
Meanwhile, the Federal Reserve Bank of New York dealt another blow to job prospects on Wall Street, noting in a recent report that “the current financial turmoil will weaken employment in the city’s finance sector.”
So what does this mean for job-hunters? For starters, be patient. Employers are bracing themselves for uncertain times, notes the Washington Post, and are therefore opting to “sit steady and be conservative in hiring,” says Paul Villella, chief executive of HireStrategy.
Wall Street’s high-profile ‘job jumpers’
The New York Times’ Dealbook takes a look at some of Wall Street’s biggest movers and shakers as they have played musical chairs in the last few months:
Days after Lehman Brothers’ bankruptcy, it emerged that Mr. Shafir, a global cohead of mergers and acquisitions, was leaving for Citigroup. Mr. Shafir stayed long enough to help sell Lehman’s United States capital-markets business to Barclays.
As head of Lehman’s communications banking group, Mr. Young, known as Woody, was that firm’s biggest rainmaker. After abruptly leaving Lehman in early 2007, he resurfaced last month at Merrill Lynch, just a week before Merrill agreed to be sold to Bank of America.
A banker’s banker, Mr. Sarkozy, the halfbrother of the French president, brokered transactions as joint global head of UBS’s financial institutions group. In March, he became co-head of the global financial services group at Carlyle Group, the private equity giant.
In his 22 years at Goldman Sachs, Mr. Kraus rose as high as co-head of its investment management division. But in May, he left to become head of strategy at Merrill Lynch, where another Goldman alum, John Thain, had recently taken the helm.
As chief financial officer at Lehman Brothers, she was one of Wall Street’s most powerful women. But she was demoted after her defense of the firm’s health failed to comfort skittish investors. In July, she jumped to Credit Suisse to run its global hedge fund business.
Mr. Schwartz became chief executive at Bear Stearns a few months before its sale to JPMorgan Chase & Company. He decided in July to leave JPMorgan and has not announced his next move. He has reportedly talked to investment banks and private equity firms.
Photo: Children play musical chairs after taking part in a role play exercise during an induction course at Mexico City’s stock market July 15, 2005. Mexico City’s stock market holds an induction course for children who’s parents would like them to learn the basics of market capitalism during their summer holidays. REUTERS/Andrew Winning
If we get any closer to a depression these people won’t be jumping jobs, they’ll be jumping buildings.
