JPM to cut half of Bear employees

well there you have it. best of luck to everyone involved

Thanks man. Though I wish they directly would say how interns would be dealt with (I know this is completely unrealistic and would not be issued in a press release), I'd like to make use of a fitting quote from Dumb and Dumber:

"So you're saying *we've* got a chance!?"

I wonder how interns would be placed as well. What ever it is, 7000 employees of which I'm assuming 1500 are in New York itself.

NEW YORK, March 17 (Reuters) - JPMorgan Chase & Co, which on Sunday agreed to acquire struggling investment bank Bear Stearns Cos for just $240 million, expects to cut about half of Bear's 14,000 employees, business news channel CNBC reported on Monday, citing unnamed sources.
JPMorgan expressed interest in Bear's prime brokerage, securities clearing and equity trading businesses, and believes Bear's investment bankers can help expand the bank's own financial advisory business. Morgan is expecting the deal to generate $6 billion of expenses, from severance and retention to waves of litigation and asset write-downs.
JPMorgan officials were not immediately available to comment.

They included Bear's INVESTMENT BANKERS...there might be some light at the end of tunnel...maybe.

is it better to accept another SA offer (even if less prestigious) rather than wait to see what JPMorgan has planned?

Please stop assuming

Hey guys,

Do you think Lehman Brothers is going to follow Bear Stearns in terms of a total f*ck up!! There going to publish there results tomorrow, they've slashed jobs, and there share price has dipped 40% today!

What do you think?

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"The future belongs to those who prepare for it today" - Malcolm X

Granted I don't normally pay attention to things like prestige, but I can't really imagine what would be less prestigious than Bear Stearns right now. Stratton Oakmont, perhaps?

Looks like they're just going to wipe out anyone in a back-office position. Expanding prime brokerage, energy, and trade-clearing is the wise thing- those should've been the 3 backbones to Bear. They're still well-respected in those avenues, and I'd bet most of the bankers who stick will be involved in their energy business and telecom, where they've done a bunch of major deals of late.

I'm curious myself what would happen to folks with full-time offers or summer offers... I don't care from a personal standpoint, but it's a nasty situation to be in, I'm sure. I presume JPM takes on the contractual obligations to employees?

Do they pay severance to FT hires in the fall? Lots of old people I know think they don't need to pay severance cause we haven't officially started yet, but I think otherwise.

What do you think will happen to Bear's IBD? Will JPM absorb their IBD division?

Hey all -

I'm actually supposed to intern there this summer...but the trader I initially interviewed with just got laid off today. Called around 12, said he was busy, so I tried again around 5. Some other person answers, and informs me that said trader "no longer works here".

As for the internship...it's anyone's guess though I've heard rumors that JPM will be absorbing us.

Honestly, they could have quit too...or maybe started looking elsewhere, I doubt they would let go of people that quickly...that's kinda nuts.

"some other person answers, and informs me that trader 'no longer works here'". thats fukin depressing.

You called a trader at Bear Stearns today to ask about your SA stint? Seriously?

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"It is a fine thing to be out on the hills alone. A man can hardly be a beast or a fool alone on a great mountain." - Francis Kilvert (1840-1879)

"Ce serait bien plus beau si je pouvais le dire à quelqu'un." - Samivel

Haha, very good point that I don't think anyone picked up on. I know everyone on here is freaking out about this summer, but I'm guessing the traders at Bear have much more to worry about today than the status of your 10-week internship. It's probably better you didn't reach him.

Call HR, part of their job is to calm hyperventilating college students.

You should be glad he didn't pick up.

When did I ever say I was calling specifically about my internship? Don't make assumptions, particularly when you could the one hyperventilating tomorrow.

not sure about growing but Bear Energy will be around and hope to stay in Houston.

Whether or not you called specifically to discuss your internship is irrelevant: the point was that it's kind of ridiculous for a college student to call a trader with whom he happened to interview at a time like this. A little inappropriate, unless he was a personal friend of yours, which he clearly wasn't, because you would have mentioned that to begin with.

I think we should have a moment of silence for our fallen brothers at Bear Stearns

http://dealbreaker.com/2008/03/no_one_not_even_the_hopeful_su.php

Then I'm assuming iy was you that leaked this to dealbreaker? Hope you enjoyed your 15 min of anonymous fame. I'm sure the rest of the BSC hopeful hires will love you spreading this rumor w/o knowing the truth behind what's actually going on.

I wonder if my unpaid summer internship will still exist! I'm a freshman now and my career is over!

Ha-ha. Just kidding. My god people, get a grip. I love my life in the entertainment industry here in Hollywood - no bankers, but still a grip of fake people. Lol

Just in from legitimate source...

my hallmate's close friend got her Bear Stearns SA offer turned down today.

...it's more serious than i thought meh.....

Best,
SoulSearching

I'd like to state that soulsearching is full of shit. Not only did he say there was a "rumor" that everyone below the VP level was going to be let go at Bear (by poorly citing the merger agreement which didn't elude to anything of the sort), but now he's making reference to a "legitimate source" though it's a hallmate's friend.

I'm currently an anxious/worried SA with Bear. I am trying to stay optimistic, but I realize the odds may not be on my side. That said, I did not receive any news today. Maybe this SA was in a different department than I, but I'd take what this dbag says with a grain of salt.

hes full of it, dont worry.

Guys on here who make these claims without knowing for sure what is going on is a severe loser. I will admit, I have become somewhat a frequent reader of these boards and I have found some useful information because of it. However, anyone coming on here making wild claims and trying to get people all riled up needs to find a hobby.

I am/was going to be a SA in Bear's IBD and I am awaiting news but it is 100 percent out of my control. I have not contacted anyone at the bank because I believe that it is somewhat innapropriate to contact people who have legitimate worries to ask about my own situation. I feel for the guy with 3 kids and a house he needs to pay down who just saw his stock in the firm widdle away to nothing. Those are the guys with real problems. In the grand scheme of things, myself and my class will make it out ok. None of us are trying to pay our mortgage, pay for our kids college and plan for retirement. We are all young and obviously had some smarts to get into a bank in the first place. I firmly believe this will all pan out and we will become stronger in some way or another. Stay positive, and hopefully something will work out, it always does.

Speak it brotha'

I heard from a source that much of Bear's IBD in the US will be let go. The likelihood of FT hires to get absorbed into JPM's IBD is highly unlikely. Been told by the source that it would be wise to look at other possible options. So sad.

Can you become an admin or something on here? That's the most rational response to the Bear situation I've seen since it started.

It is 100% out of your control, in fact they probably haven't even decided what is going to happen yet. Sure, consider other options, but don't assume anything.

http://www.mergersandinquisitions.com/
Mergers & Inquisitions

i posted this elsewhere, but now i cant find the topic or its tracking on my acct, so just to reiterate whati said before:

i dont want to be alarmist, but if you are a bear sa, you really should not be adopting the wait and see approach. i don't have any insider info, haven't heard any rumors, etc.

but consider the following:

it costs roughly 20k to employ a summer intern for the summer after employer taxes. if there are 100 summer analysts, that is a cost of 2 million dollars, or a little less than 1% of bears market cap according to jpm.

and remember, summer analysts add zero value to the firm--they are a pure human capital investment. this makes sense for an organization that is growing etc-->not one that is about to lay off half its staff. if youre going to be in bear energy, equities, or pb, youd probably be ok. otherwise, really start the search for alternative opportunities.

I am a college athlete, and have been in sports my whole life. I have played at levels where coaches get paid to win and therfore treat kids like shit just to do so. If I was a coach/company, and you gave me the opportunity to have an 40 kids come to my tryouts/intern to see who will make it into my team/company, I would do it in a heart beat. JPM obviously did not pick an intern class full of all stars, no firm ever does. If they pick up Bear's class, they end up with a 09 FT analyst class of top talent (the best from both). To me, it is worth the 2 million dollars (subtract it off the 1.4 billion of the building and your left with 1.398 billion lol).

just my opinion but I doubt they honor Bear SA's in IBD, you're looking at a business environment where everyone on the street is cutting back jobs due to the difficult market and lack of deal flow. JP has a higher rated IB than Bear, their mentality in this is that they are the superior bank and they will take who they like and who can add value. that is certainly not an SA, plus JP hasnt interviewed these SA's so they are going to go with the guys they hired themselves. this isnt just an SA issue either, there are sure to be plenty of analysts/associates that are in Bears program that are going to be let go, doesnt matter if they are cheap or not. again this is just my opinion but across IBD id be shocked if more than 15% of Bears people come out of this employed. in FI Cap Mkts/S&T id think itll be the same or worse, with some mbs people staying on since Bear has some top notch mbs guys. honestly its out of your control as to what happens, the best thing you can do is try to find other opportunities for yourself in case the SA program is cancelled. by that point you will most likely have more clarity on the situation and will be able to make a better decision.

i want to make one point that hasn't been made yet. it is very important for bulge bracket banks to have good relationships with target schools (undergrad and MBA). If JPM does wind up not honoring Bear's PT and FT offers, it would likely strain their relationships with schools. i'm not saying it won't happen but it is one reason why they may wind up honoring more offers (or giving 1 year deferrals or even severance) than pure economics would suggest.

to xqtrack: there are only 35 SAs at Bear Stearns, not 100, which would mean it costs less than $1M to keep us. that's petty change compared to Bear or JPM's market cap.

to analyst26: i have no insider info myself, so this is all my own opinion. but you also have to think about the fact that all 35 SAs WERE interviewed and ARE qualified candidates. the only difference between firms is culture. certain banks will choose certain candidates not only based on how technically proficient they are, but how the firm feels the candidate will fit into the firm. with JPM's new acquisition, they will need to integrate Bear's culture in some way. from that standpoint, to say that they wont honor Bear's SA contracts because they are a superior bank and have interviewed and hired only the SAs they want doesnt make too much sense.

ex-banker: I was thinking something along those lines. Maybe they'll keep the class for that reason. That said, as a non-target I suppose I'd still be at risk, unless they decided to keep the entire class.

KMM: I totally agree. The summer analyst program is like aquiring slave labor. We're only on their books for 2 months, and Bear has probably taken care of a good bit of the work already. All they have to do is let us work our asses off for them and then can fire us all shortly afterward if we are really that substandard to their recruiting class that is coming in.

thestreet86: i really doubt they would honor offers from targets and not from non-targets. whatever they wind up doing, i would be shocked if it wasn't consistent for the whole class (in terms of target/non-target). different functions/groups might get very different treatment.

you really think that jpmorgan's relationship with schools is going to play a factor in this for them? what's going to happen...is harvard's career services going to put in a phone call to jamie dimon and be like, 'yo jamie, we know you're throwing out 7,000 people and that all of them now have life savings worth jack shit...but seriously, think about the summers. we're watching you..." do you think that next year princeton recruits are going to be like, you fuckers fired the bear stearns summer analysts even though you kept all your own, so i'm not going to go to jpm?

even if there are only 35 summer analysts...that's still a cost of 600k to the bank. or 2 traders. or 2 associates. ie, people who add value. summer interns are trainees. in s&t, you guys aren't even licensed to do anything. in ibd, you could still crank out models, but that assumes that bear has models to be cranked out that the current non-fired staff couldn't handle.

anyways, i'm done on this topic--regardless, i really hope things work out for you guys. i have some friends who were going to be at bear this summer, and i hope you all get lucky. but really, start the work looking for an alternative offer now; you have nothing to lose.

im with xqtrack here. they arent going to care about hurting their rep with schools, even if they were banned one year from campus you think kids wouldnt be falling over themselves trying to get hired anyway? you need to be realistic, these firm dont care about SA's, it dog eat dog. you think if there was good will on wall st jp would've paid $2/share for bear? to the poster above, jp most likely thinks the SA's they hired are better than Bears so with that in mind they will proceed with the people they hand selected. again just my opinion

look, i'm not saying repuation is going to be the most important factor in whether JPM honors Bear SA offers, but yes I do think that it plays a role. And yes, reputation on campuses is worth more than 600k. The issue is not that JPM won't be able to fill slots in years to come, it is that they may not be as competitive for top candidates if reputation is damaged. Finally, these firms do care about SAs. Why else would they have them (given that they are pretty much useless from a work product standpoint)?

read something earlier today that pretty much sums up the situation. "when Rome wins, Romans take over" you can choose to believe different and maybe they will decide to honor all SA offers, as a matter of fact i hope i am wrong so you guys get a good experience during the summer but that doesnt change my point of view of what i think is the most likely outcome.

Well said. It's a hilarious notion that JPM would even think about relationships with universities at this point. In bad times, companies will withdraw offers - it happened in 01-02 with I-Banks and Consulting firms, and it might start happening again here shortly.

Of course the career mgmt office at each school is not happy about it, but WTF are they going to do? Stop JPM from recruiting their kids? That's going to do more harm to their own students rather than JPM. It's a buyers market right now, and the best thing to do is to come to this realization and grab any IB job/internship you can get.

All my support goes out to you guys.

A few of my thoughts..

To disagree with a statement above, JPM absolutely cares about the Bear SAs. The last thing they want to do is a lay-off a class of strong candidates. It hurts everybody. However, JPM's priorities are with its shareholders.

Is it difficult to lay someone off? Yes!

Is it hard to crush someone's hopes and plans? Yes!

We all know that at the end of the day JPM will do what is best for JPM.

Is JPM concerned about its relationship with core-schools? Yes! Is it concerned enough to be fiscally irresponsible? No! Does career services understand this? Yes! Next year those target schools will be throwing more resumes at JPM because Bear is gone.

My advice to Bear SAs: take initiative (you guys are used to doing this anyway), stop reading this stupid thread and go find some fantastic opportunity to replace your internship if necessary.