Caught wind of a rumor today and then found this release:
http://dealbreaker.com/2008/04/sensing_youre_abou…
Apparently Jefferies cut their 2nd year analyst class and they received 2.5 months severance and 75% of last year's bonus.
Anyone have any details?
Sounds like a sweet deal to me.
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I don't really have any friends at Jefferies (and I usually don't trust Dealbreaker) but another associate here does and says it's true. Although his friends say it was all second years, not just ones with offers lined up. He actually told me about it yesterday before Dealbreaker had posted about it.
Yeah, heard about that too, supposedly all but a few of them were released...wow
If I had a job lined up for the summer, I'd gladly take it.
This one is a head-scratcher for me. Why do it?
You're giving them severance that approaches the remainder of their term. Let them serve it out. Most second years are starting to check out at this point regardless. From a cost perspective, you are only saving the delta between 75% of last year's first years and what you would underpay for this year, right? And now you're forcing them to explain the whole layoff thing for the next job they take.
If it were me, I'd just pull the their third year offers, pay them the 75% of last year as their exit bonus, and let them use the next few months to line up a new job without the stigma of a layoff.
It's perplexing.
in these kind of market conditions and outlook everybody may get laid off... explaining the layoff is much easier than it was last year around this time even the high top performers are laid off or new VP promotes at MS/GS
But it still needs an explanation, regardless of whether it's easier or not.
But I was speaking from the perspective of the firm, rather than of the analysts. It just seems like a decision which was made that benefitted the firm very little, while potentially burdening the analysts disproportionately.
Look, I'm not naive. I know Jefferies is a small public company. Laying them off let's you lump the bonuses and remaining salaries as a one-time severance expense versus ongoing compensation, but I think that's a miserable reason to lay off a bunch of junior bankers when the actual dollar difference is minimal versus letting them finish their terms.
Seems like they're gonna build up some serious negative sentiment with regards to junior level employees. If I saw something like this happen I'd think twice about working there or suggesting someone work there.
Agree with Ghenghis that the mathematics of it certainly don't make sense this late in the year. I would add though, the analysts getting laid off just got themselves a three month paid vacation, which I'm doubting anyone is complaining about!
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