Are first year associates spared ?
Hello, I am joining a BB later this year as a first year associate (post MBA). With all the talks of recession and layoffs, I am wondering whether banks will lay-off first year associates, or are we relatively safe? I know performance is a factor but since first years are new to the bank, how will they decide who to layoff?
I work at a bank that is generally considered one that fared rather well through this whole crises and I will say, no one is safe. Even if your group did well this year, if the outlook is bad next year, you are not safe.
Junior associates are, ostensibly, in a bank on a career path (they want to be there long term) unlike an analyst who has a defined term to their tenor. Also, junior associates, especially first years, have no banking skills, industry know-how, client experience, or any of the other value that might be added by a senior associate. Generally, it is perceived that generalist associates in their first year (stub associates in the "pool" at most banks) are in a very insecure position.
1st year associates cost a lot more than analysts, provide a lot less value, and are perceived to have the ability to go get another job (you have an MBA). This makes it much easier for banks to justify pairing down the class.
This isn't to say that you should be worried, only in the case of layoffs in the IB at your particular firm where they wield the ax at levels aside from underperforming management, would you have to worry.
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