What exactly happened to all the fired analysts/bankers in 2008?
As someone entering finance soon, it is growing interest to me. From what I remember and how it was seemingly perceived in the media, banks were letting people go like they were nothing. Did they go into different fields (corp fin, consulting) and/or cities, or did they just sit in unemployment till things mellowed out a few years later? Sorry if this is an incredibly stupid post. I obviously wasn't in the finance scene when this all went down, and I didn't really follow the developments of it, but it really interests me. Thanks for any help.
They went all over the place, and some were successful and some were unsuccessful.
From my personal network....lower tier BB's, corp fin/corp 500, consulting, start-ups, and entrepreneurship were all popular.
Yeah, I figured it was something like that. The media seemed to enjoy perceiving it as a bunch of bankers were now stay-at-home parents and went into early retirement lol
FWIW, I know a couple people at a mid-tier BB who were let go during that time, and subsequently hired back when the firm staffed up again.
The hardest hit people were new hires. There's a lost generation of high finance practitioners between the approximate ages of 28 and 30 (2007-ish to 2009 graduates--I say "ish" for 2007 because hiring wasn't terrible in 2007 but a great deal of analysts with less than 1 year of experience got the hack with the spring 2008 collapse). Those with real experience (greater than 1 year), from what I can tell, were mostly able to recover. Those who never got the opportunity to get hired simply went in other directions.
That's strangely eerie. Just a generation of college grads that pretty much just never got the chance. Funny how life works like that.
It is. I'm 30, and I'm obviously not saying that 28-30-year-olds don't exist in the business but there aren't many. I've been consistently the oldest and youngest in my various organizations (probably 4 organizations at this point).
I've noticed quite a few in business development type roles at B/Ds and research shops, they were traders, in credit, investment banking, etc. mostly traders though.
Someone should write a book or direct a movie about this. Maybe with a similar approach/point of view used by Kevin Roose in 'Young Money: Inside the Hidden World of Wall Street's Post-Crash Recruits'.
Margin Call 2
Some people had it worse, like those in the lower dregs of the real estate industry (mortgage brokers, contracters, etc.) They got fucked in the ass and most had no college degree to fall back on.
That's a lot of horse shit about the young bankers. The older bankers were given packages to exit, and a lot of them got out of banking at that time. Recruiting was tightened, so very little grads were coming into banks. The ones that got let go and had a little bit of banking experience usually ended up finding a job in banking later on. The reason you don't see a lot of 28-30 is because there was a dry period in recruiting, not that all the young bankers were let go and never found a job, they were just NEVER hired in the first place and had to do something else.
The guys that I saw get hurt the most were senior level but not executive guys (so an SVP/ED/MD, not the CxO worth 9 figures) that had most of their net worth tied up in company stock like Lehman, Bear, etc. and lost it. It's much more difficult to recover as a 50 yr old MD who just lost 75% of their non house net worth because they had it in Lehman stock (sorry Dick...), be out of a job, have existing personal costs and be one of X000 on the street looking for a job. They landed at various places but most were not on the same trajectory and comp levels they once were and lost lots of money in the process.
It's easy to rebound if you were a 23 year old Ivy grad with a year of IB experience. You may not have the exact same job and your career may go differently than you had anticipated but it's much easier to tweak things at that point than when you're older and your entire career and personal finances have been blown out of the water because of a black swan.
I started around 2008. Some of my friends landed on their feet, some better than others, while others are still finding their way. For example, I have a buddy who got fired from alev fin job in 2008 who ended up at Fortress doing distressed and now he is doing very well (title and $$)
I have another friend who couldn't find a job for a year, got an MBA and now is in a back a couple years behind everyone else our class
Finally, I have someone who couldn't find a job, and has bounced around from 3-4 jobs 1-2 years at a time
It varies. Don't worry - things sort itself out over a 10 year period
I actually know one guy that went back to college for a degree in Engineering, after being laid off around '09. A year after graduation he was AGAIN laid off, but now in the oil industry (Last fall). Talk about double whammy.
But FWIW, a lot of my friends moved to startups and tech.
Analysts and Associates who were any good and wanted to stay in the business found jobs eventually (though as others have said, many left for startups and jobs in tech). MD's with revenue generating potential likewise found positions, though most had to settle for firms that were arguably less prestigious than the ones they'd left. The axe fell hardest on VP's and Directors. They were too experienced to be marketable as associates and not senior enough to have revenue generating potential. Most of those people have left the business and from what I know they're all over the lot. Anyone entering finance should understand that it's a cyclical business - always was, always will be, no matter what anyone says.
From my experience, ended up losing a BB IBD offer and starting at a small boutique focused on special situations merchant banking, moved to after a couple of years BB TMT EQR because my first interest had always been in tech. Eventually found my to a fairly prominent growth equity group that focuses on Fintech which actually brought together a lot of my experience from my first two roles. I'd say it was a somewhat frustrating 5 year period right after graduating from a top tier undergrad, but I took it in stride and made sure I extracted the most I could from my two roles on the sellside. Granted it probably set me back 2-3 years earlier in my career but looking at things now I'm at VP level at well recognized group and the bulk of my peers who got "on track" starts in BB IBD etc. and eventually moved to the buyside are more or less at the same level. I do agree, over a 10 year period making mostly the right decisions, even with not so great luck you end up where you're supposed to be.
Amet dicta quia omnis quia. Blanditiis molestias sint laborum omnis. Reiciendis impedit quia ab voluptatem reiciendis at autem. Ut quas sit quod recusandae.
Dolorem ullam odit voluptatum qui nemo. Ut rerum molestiae iste consequatur quod sapiente culpa. Molestiae est deserunt nihil sit aliquam culpa.
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...