Never seen it happen in my group or other coverage teams I am familiar with. But a few banks (many in MM) fired two-digit people during pandemic. Does that expose them the risk of being sued and what's the rationale behind never firing analysts?
| +379 | Evercore Intern Seizure | 56 | 1h |
| +74 | JPM M&A is Gone??? Purely Coverage Banking??? | 33 | 1h |
| +62 | Is DCM actually underrated ? | 26 | 23m |
| +53 | How do I understand vs. just memorizing? | 9 | 2h |
| +48 | Losing my personality in Banking | 9 | 1d |
| +47 | Are all Tech / TMT groups sweaty? | 38 | 1d |
| +42 | Associate & Above IB exits | 16 | 4d |
| +33 | Incoming IB Analyst: Best Ways to Prepare? | 11 | 8h |
| +27 | Which groups are ideal for laterals? | 12 | 1d |
| +24 | Thoughts on PEI Global Partners? | 4 | 2d |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
It’s rare. But when it happens it doesn’t result in lawsuits, lol.
Usually, terribly performing analysts will be given a “get lost” bonus of $5k and make their own decision.
in that case they only got one year left, worth it to fire him if he keeps low performance? Heard a couple analysts started leaving office at 5 every day after get PE offers.
It does happen, but it’s rare if the bank is doing well. Usually just means low bonuses, no third year offer.
Kids do check out after PE, but that’s usually also because they’re rolling off stuff. If they totally blow off work they get a crap bonus
Heard banks don't actually care, just a misconception and they can get rid of bad analysts easily.
Even though they could technically fire you at any moment, I think it would expose them to some type of liability unless there's a documented track record of bad performance (ie reviews, reprimands). So as another used said, probably more common to just give them an absurdly low bonus and have them resign on their own. And even then, probably easier to have them complete the 2 years and just not promote them to associate.
I don't believe there is any "liability" if a bank fires you; unless you have a guaranteed contract (MLB player), most employment agreements are employment "at will," where either side can terminate the relationship without legal liability as long as the termination doesn't violate a legally protected status (discrimination, pregnancy).
I agree. But how, as a bank, do you defend yourself against a discrimination accusation if there's no written track record of underperformance? I know its very unlikely for an analyst to sue a bank but that's where they are exposed. Even more so if you play the race card, or gender card. Nothing worse than a headline coming out, however false it may be. These closed-door settlements happen all the time at higher levels. Not so much at analyst level.
Didn't some analyst sue JPM over sexism a while go?
As another person posted there is definitely liability when a bank fires someone. That is not to say that you can sue a bank just because you were fired, but without good and proper documentation someone can argue discrimination (again someone already posted this, just reiterating).
Firms spend a lot of time and energy to make sure they are protected if needing to fire someone.
Finally, outside of the legal side, reputation risk is a real thing. If you are a bank that fires 50% of your analysts and everyone else fires 5%, do you really think a new grad will want to join your firm?
In hindsight, I find it funny that my IB team always made me feel like I'm about to get fired for the smallest mistake......but no one actually gets fired...
I've seen and heard stories about analysts getting fired. Generally it is rare though.
And usually would be as a lay off so there is serverance.
Has happened in my group and with friend Across all different front office roles and banks.
No - the new grad campus programs don’t save you. No - no one is going to sue lol. No - your firm won’t blow up recruiting channels.
Yes - the bank will live without you. You’ll grab another job. The world will keep turning.
When they do a rift and axe people it is based on a number. Usually the comp they are allocated and the need to pay high earners/performers and allocate a limited pool of cash. A couple hundred K makes the difference between keeping talent and losing talent. Other times it is a headcount thing and “it is what it is.” Axe a Director? Nope - will can an associate and an analyst to keep the Director instead. Honestly, the logic makes sense. Even if the Director sucks and is over paid they still add more value than almost all analysts-VP. New crop of hardos arriving in the fall ready to work in the elevator if asked. Plus, just overwork another junior who will prly leave anyways. “EHE” everybody hates everybody.
I never understand the over thinking... I guess it is just human. At the end of the day, you got unlucky and had bad timing and got your head cut off. You’re 22-25 with a sick resume, some severance pay, a bit of savings. On to the next show.
Are you really working in IB?
MS all you want. Most of these groups can function with their rainmaker head, a couple superstar MDs and a few hardo, reliable analysts with maybe one person more senior than them to check errors. People in the middle add almost no values until they start bringing businesses.
The SA stint and training should filter out most of the objectively bad candidates so inherently the need to fire analysts is already low-those candidates that don't work out later get pushed out. I doubt there's any significant liability from firing analysts specifically.
Aut occaecati ea perspiciatis consequatur est necessitatibus. Architecto est ut porro natus rerum. Architecto veritatis illum id vel a distinctio aut. Itaque dolor vitae dolorum cupiditate delectus.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...