Losing your job due to recession

I am sure this has already been discussed however I could not find anything searching.

Anyway, my question is: How likely is it for someone to lose their job as an investment banker if a recession hits? And if you do lose your job what do you go to until you can get back into investment banking?

 
zeropaid06:
I am sure this has already been discussed however I could not find anything searching.

Anyway, my question is: How likely is it for someone to lose their job as an investment banker if a recession hits? And if you do lose your job what do you go to until you can get back into investment banking?

Many recent/new grads have really benefitted from the hot hiring market, but I think banks are being smarter about this current cycle. You're not seeing the runaway hiring that happened during the dot-com. 5-6 years ago, opportunities were definately scarce after the banks made wholesale cuts to staff due to overhiring. Many of my peers lost their jobs during the last cycle and had a hell of a time trying to find work.

One of the smarter guys I knew sensed we were near the "top" and opted to join the restructuring practice of a bank. He did pretty well for himself when sh!t hit the fan.

I recently talked to him about the restructuring business, and he said while things have been slow many banks are starting to ramp up their restructuring practices in anticipation of the next credit/business cycle. We'll see if he's right but it's not a coincidence banks and funds are raising money money and ramping restructuring business.

With all that said, it probably wouldn't be a bad idea to join the restructuring group of a bank.

 

Consulting is kinda iffy, it's also slightly counter-cyclical. (Somebody has to be the Bobs.) Heard from that consulting still gets cost-reduction engagements in a downturn, but wouldn't want to be a newbie in consulting over next 2-3 years.

I actually think accounting would be the same or better, cause you really can't eliminate alot of the auditing and tax work, and it's cheaper to hire new blood to do grunt work than to retain slightly senior analyst level accountants.

 
Best Response

It depends on what type of consulting. In a recession all non-essential "luxury cap-EX" budget requests get slashed brutally and that includes strategy consulting, and technology investments..which can all wait.

Trust me, if management is fighting to stay alive, he just doesn't have the resources to keep paying for indefinite studies, which he must eventually implement anyway. He MUST act now utilizing the talents in his current, and hopefully experienced management team.

In the heat of the moment, current management MUST fix the situation, or they get fired. Management rarely hires more expensive consultants, especially in a down-turn.

If it's anyone hiring them, it's the board, and not necessarily for improvement, but to make a credible case as to the extent that the current management has things screwed up, and why a change is needed..Bottom-line: Tell us why current management should be fired.

That's why the consultants stay small, to avoid huge cuts in a down-turn.

But restructuring or debt-work out firms such as Alix partners, Alvarez & Marsal, FTI, HLHZ, Big4 restructuring, and IB restructuring will certainly add value in a slow-down, especially in the recap space to help with internal liquidity, and working capital needs, that are hard to come by in a downturn. These groups are typically very small, with finance and legal folks to manage the bankruptcy process.

Big4 would do well in all seasons as long as stringent Sarb-Ox mandates remain.

I'm not bashing consulting, just stating how things really are in the board room.

 

I wouldn't be worried about a lower % of FT offers being extended to summer analysts.  In fact, I'd say that banks will now be giving out a higher percentage of FT offers to summer analysts, and doing far less outside FT recruiting (already being done).  ppl should be more worried about the number of SA offers being extended.  Granted, this is all assuming things don't get too much worse, as all bets are off.

 
nystateofmind:

I wouldn't be worried about a lower % of FT offers being extended to summer analysts. In fact, I'd say that banks will now be giving out a higher percentage of FT offers to summer analysts, and doing far less outside FT recruiting (already being done). ppl should be more worried about the number of SA offers being extended. Granted, this is all assuming things don't get too much worse, as all bets are off.

If things don't improve it will be more of what we saw this year. Banks are going to hire less, and will look to eliminate any risk of hiring a non-worthy analyst. As a result, they will pull mostly from the kids they know best (the summer interns), and then take few chances on the rest of the pack. So..if you get a SA spot, you are in good shape.

 

Bobcat09, We dont need your stupid comments in this forum. We pretty much have a general understanding of the direction of the economy. In fact there will be a significant reduction in M&A deals and other activities that generate revenue to Investment banks. So you have not done anything to answer the question, maybe the fact that you haven't secured anything for the summer and that you suck at life represents the attitude you have towards the forum

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They say money can't buy happiness? Look at the fucking smile on my face. Ear to ear, baby.

They say money can't buy happiness? Look at the fucking smile on my face. Ear to ear, baby.
 

I appreciate all of your answers, we can see the difference between really mature and experienced people and foolish tool's



They say money can't buy happiness? Look at the fucking smile on my face. Ear to ear, baby.

They say money can't buy happiness? Look at the fucking smile on my face. Ear to ear, baby.
 

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