http://www.cnbc.com/2016/07/28/bbt-cuts-jobs-as-i…
Surprised that this wasn't here already. But for any aspiring equity researchers (looking at those ppl who've messaged me as of late asking for advice), this is the risk of entering a field in decline. I remember BB&T was hiring not all that long ago (~1 yr ago) and whichever unlucky person got it ended up getting the really short end of the stick.
Now this isn't to say that sell-side ER is vanishing altogether. People who say that largely don't know what they're talking about. Having said that, the pain is real and breaking into the industry through a smaller regional shop potentially exposes an individual to unpredictable, binary eventualities such as this one.
In happier news... at least it's Friday. Cheers!
I read Evercore and Oppenheimer laying off analysts as well. Is it possible that this is just cyclical? BB&T is citing lack of deals, maybe that's why they have no need for people to drum up the issues with reports?
While there are cyclical trends in ER, there are ongoing, permanent reductions in industry wide headcount. Plenty of high ranked shops are also laying people off and having the survivors either pick up more coverage, or just dropping less profitable names altogether (either from an IBD or trading perspective), Obviously, the situation at BB&T is not a 'cyclical' development and as other smaller shops follow suit (e.g. Sterne Agee), there'll be an oversupply of ER professionals with nowhere to go.
However, as with all things, eventually we'll reach some equilibrium and hopefully the environment is a lot less depressing then. When this will come about and where the industry will ultimately end up though, I have no idea.
Where do you think these oversupply ER professionals will likely end up? I guess this is the same as asking what are the exit opportunities of sell side equity research? (other than going to buy-side, which is reserved for those who understand price and value)
It may not be "vanishing altogether," but it is in serious decline and will continue to decline for many years. There are way too many brokers out there and headcount must go down significantly.
100% agree. Unfortunately I don't see an end in sight. Maybe in 5-10 years after 50-70% of headcount leaves the industry. What people need to grasp is that the equity research revenue just isn't coming back. Soft dollars are going way down.
I've seen some enter the industry they previously covered. A classic exit route is going into investor relations. The problem is the compensation differential is huge.
How's ER doing at the BBs?
Varies shop by shop. I've heard of relatively recent layoffs at a number of them, including the top ranked firms. And unlike before, not as many boutiques for these guys to fall back on.
For the new folks, remember equities aren't everything. The fixed income/structured products space is multiplies the size of the equity market and it's something Joe blow on Twitter can't easily comprehend. Where there's size and complexity, there's opportunity
What blows my mind is that big long only shops like Capital/Fido/Wellington have literally 200 research providers that they pay. Definitely plenty of fat to cut. But there is a wide range of outcomes even in an environment where ER overall shrinks - the top players should gain share.
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