MASS LAYOFFS in corporate finance investment banking!!!
Everyone is worried about bonuses being lower next summer, when in fact we should be worrying about our JOBS.
Am I being crazy here? Will layoffs be contained to mortgage units and S+T dealing with credit derivatives? Or are we on the chopping block too?
What does everyone think: - To what extent will core IBD corporate finance be affected in terms of layoffs - If layoffs are imminent, WHEN will they occur? - If they do occur, to what extent will they impact the analyst/associate level? - If they do impact analyst/associate level, how large will the cuts be? 10%? 20% 30%+?
POST YOUR THOUGHTS!!!!
my group just hired an ass and a 2nd yr lateral analyst. we are pretty understaffed as of now. so i dont feel that scared.
a "not so good" soon to be 3rd associate was just poached from our group to another BB. think he got a very good offer. i think the hiring frenzy from the HFs and PE put some favorable pressure on supply. hopefully the market will not TANKKK in which case we should be OK.
but i do wonder how bad the bonus will be.... my guess is back to levels of 2003/04, which would be about half of this year's amount.
nice thread title, douche...
Nobody in the analyst/assoc. level is going to get laid off. It costs peanuts to a bank to staff them anyway. Itll be the underperforming middle management that goes first like always. Second. Most costs cutting that could be achieved from downsizing staff can be obtained more cheaply through attrition anyway. Just over the next year enough people willnwalk out of ibanking on thier own to cut the payroll. Take into account bonuses will prob be lower anyway, and theres not much trade off in cutting them now and handing out severence packages.
why do people say this? in 2001, did banks cut middle mgmt first? does history actually confirm your perspective?
why would the cheapness of analysts convince them that they're worth keeping on board? they're still a waste of money if there isn't that much work to go around.
the more experienced bankers are not nearly as commoditized as these 22-year old analysts. besides, who says you have to fire an MD when you can just give him a $0.00 bonus?
I'm not saying it's right or fair but that's what happened. You shouldn't feel that you are immune just because you are junior.
The truth is, nobody knows what is going to happen. There is a ton of speculation right now about how hard everyone is getting hit and what their responses are going to be, but no one really has an honest clue.
What is certain though is that banks need to worry about their reputation. If a bank doles out a $0 bonus or fires a bunch of people, this will get noticed and hurt its reputation. While money comes into play in a major way, it isn't the only thing that is going to decide how banks are going to respond.
Having gotten "hit" at a relatively senior level in 2002 after 5 previous rounds, I can tell you what will happen. All the banks will layoff at around the same time. Reputation counts for nothing. For example, at my previous bank, they told the 3rd year promoted analysts to get lost mid-year through their program.
The first rounds will be the obvious misfits - MD's who can't produce, VP's who were promoted just because business was good, etc. 2nd/3rd year promotions will be iced. After that, if the slowdown is permanent, they will whack all the junior people who aren't needed, since there aren't enough deals. Remember, banks care most about the clients seeing the same face. Junior people are interchangeable. By sector, count on structured finance, leveraged finance, financial sponsors and M&A to get hit.
Good luck to all. Make sure you're ranked well and in a productive group.
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