How screwed are IB associates if they're laid off?

Teddy1999's picture
Rank: Baboon | 144

While I'm about to transition into IB this summer, a family friend of mine who was a 3rd yr associate (Top 10 MBA) in RE IB coverage at a BB in NY was laid off early Sept and it's now about to be Feb and he still hasn't been able to get an offer anywhere. For obvious reasons, he hasn't told recruiters or wherever he's interviewing at that he's been laid off.

He has interviewed some but these jobs aren't even banking; they're corporate dev and consulting. And not even in NY; all interest in him has been outside of NY.

Why aren't banks interviewing him?

Granted he wasn't top bucket and the writing was on the wall when he was passed over for VP but I thought he would get more opportunity in NY with other banks once he puts his name and experience out there. I'm just surprised how a senior associate at a top BB from a top MBA program has such a hard time getting hired somewhere else.

How screwed is are IB associates once they get laid off?

What have you noticed from associate colleagues that have been laid off? Did they land at another bank quickly or did they also languish in purgatory until landing a job that's not even banking and a major step down pay?

Comments (34)

Jan 30, 2020

There are many reasons.

First off, lateral recruiting generally occurs in Q1 / Q2 of each year. Most banks prefer to not hire laterally in the back-half of the year given a candidate's expectation for a guaranteed compensation package for the fully year.

Secondly, most banks will view being passed up for VP promotion as a red flag. It's also difficult for banks to hire an associate that has an expectation to be promoted within the first 12 months on the job.

Lastly, Wall Street isn't currently in a position of strength. The U.S. fee pool was down ~11% in 2019 and many banks are looking to reduce existing headcount.

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Jan 30, 2020

Good point about the lateral timing cycle; also makes sense that a 3rd yr associate passed over for VP is in no-man's land even if lateraled into another bank.
Then it seems like the ideal lateral time frame is at the 1-2 year mark for associates. Maybe they lateral knowing they have a better shot at making VP in a smaller group with less associate competition?

  • Associate 1 in IB - Gen
Jan 30, 2020

As someone currently looking to lateral I must say the situation for associates is pretty dire. There are only a small handful of job openings out there as a result of banking groups shrinking headcount, less voluntary turnover, and mba/a2a classes filling the void.

The competition for these limited spots is intense. You have people going downmarket from BBs to MM (sometimes not by choice) and then you have the a2a guys who run circles looking to move to Associate at other banks, the boutique hustlers looking to go upmarket, and finally the increasing amount of MBA grads who didn't get summer return offers.

I can see why your relative is switching gears to consulting as that industry unlike banking seems to be hiring like crazy and is generally a better spot to be over the next couple of years as investment banking continues to shrink.

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Jan 30, 2020

Out of curiosity, would you think the job market is toughest on post-mba associates? I would think banks would be more open to an A2A for their limited roles, as that person has proven they can grind as an analyst and has more experience in banking

  • Analyst 2 in IB-M&A
Jan 31, 2020

MBA associates are almost always viewed as inferior to A2A by banks (from analysts to MDs), so that might be a reason too

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  • Prospect in IB - Gen
Jan 30, 2020

As an analyst who's looking to lateral since Sept 2019, I have been tracking IB analyst roles everyday and it doesn't seem like much have opened up. I'm expecting more roles in Feb after bonus.

Jan 30, 2020

Makes sense to wait to check after all the dust settles from Q1 headcount cuts, bonus payouts and promotions.
How are you checking? Through the grapevine chatting with connects at other banks or calling headhunters for the latest news?

  • Prospect in IB - Gen
Jan 30, 2020

I have been constantly looking up linkedin everyday and looking at the firm's career website on a weekly basis. I applied to mainly MM banks, since I didn't see any opening besides from BAML for BB. So far, I have done a interview at Truist around Oct/Nov then I did two more interviews at a LMM regional bank in Charlotte and a reputable MM in New york this month. These interviews were just through applying online. I have just started to network with some MM guys this week, I will let you guys know if I hear anything. Obviously this is all for the analyst roles, cant speak for associate.

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Jan 30, 2020

Would appreciate insight from anyone who has gone through this. Hopefully there is another landing spot in IB for OPs friend and others in this boat.

Jan 30, 2020

Most associates if they are laid off move out of banking into something else. Most that I know went into corporate and are now very successful and happy in their roles.

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Jan 30, 2020

Damn...that might be the reality for my laid-off buddy; seems like it's a forced early retirement from banking...jeeze

Jan 30, 2020

Going to the corporate side is hardly the end of the world. A lot of people like it more, and some even return to IB later. I know senior bankers who did a stint in corp dev and came back later.

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Jan 30, 2020

.

Most Helpful
Jan 31, 2020

I've had this happen to colleagues at different levels (Analyst to Director). There is one guiding factor that determines how easily/successfully you will be able to lateral in any situation (whether you are laid off or just looking): deal experience. Your bank's brand is usually a distant second.

For someone who is a recruiter or head hunter or any way involved in hiring (other bankers at later stages), it's the best/only proxy for how good you are.

Here's the problem: BB's (while great platforms, good prestige with larger deal sizes and generally great training programs and technical development) have deal cycles that take YEARS. Some of the largest marquee deals will take years to do and will burn through analyst/associate classes without a tombstone. So you could be lateraling as a junior (analyst or associate) banker and have little deal experience to talk about. That can make it really difficult to move.

I've seen very talented junior bankers struggle to move because they didn't have much to talk about. I've also likewise seen bumblef*ck idiot bankers move easily because they had deals to talk about that they were "on" (but actually did nothing). Unfortunately, sometimes luck just doesn't bend your way.

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  • Prospect in AM - Other
Jan 31, 2020

Is he only looking at real estate groups? I imagine that would be pretty limiting as those groups are normally quite small.

Jan 31, 2020

Yes b/c his relevant deal experience is in RE; doesn't make sense for him to suddenly want to recruit at a different bank in a different coverage group like energy. It is really rare for associates even within the same bank to switch coverage groups; coverage to product yes I've heard at higher levels but from one industry to a completely different one? That's a hard sell.

Jan 31, 2020

This doom and gloom stuff is ridiculous. As if everybody knows everybody and a single blemish eliminates all future hope. Seeing a few comments questioning "can you really move from corp dev bank to banking?" Of course you can. Life is not linear and paths are not set in stone. Besides, if they were would you really be that interested? I know plenty of people who have moved back and forth between corporate and banking roles based on their current skill set and personal preference. Make your own bed; don't let others make it for you.

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  • Analyst 2 in IB - Ind
Feb 4, 2020

Thank you for this. To add, I'm not sure why people are acting like IB/finance is dead. The rise of tech has cut off a lot of competition (more people are going into finance roles at big tech firms) for those who can't take the IB hours and culture.

Put in the work and it's as easy as it has been in the past, if not easier.

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Jan 31, 2020

Honestly sounds like this guy is doing something wrong. As someone who recently went through a lateral associate recruiting process I actually found plenty of opportunities. Granted it may be different given I was already employed at the time, but I still have a hard time imagining his process and interviewing are flawless.

Sounds like he is severely limiting himself, probably only interested in more senior-associate roles and then only looking at RE. That's not a huge pool. There is no way this guy is such an RE industry vet that he can't look elsewhere, I have known plenty of associates who go to other groups or banks that focus on completely different industries. I have also known plenty of VPs and even MDs who have done something similar. The industry is an easier thing to learn than the process and general working dynamics, and if banks don't want someone with RE experience they just won't look at you - so I don't understand why you wouldn't be applying for those.

The fact that he can't get his head out of his ass enough to realize he needs to widen his net likely speaks to a broader ineptitude in terms of basic reasoning and awareness. His irrational selectivity is probably coming through in the way he presents himself, and turning a lot of people off. IB likes hunger, and some <30 yr old who has an MBA and thinks his failure within a BB environment earns him anything does not scream that. It actually sounds like the opposite - someone who is expecting a lot and going to perform at a low ceiling.

Somebody who's so 'screwed' that, after 5 months of unemployment, they have to look at consulting and corp dev jobs (and god forbid they be outside of NY) needs a dose of reality, and to realize they should be lucky enough to have anyone paying them.

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Feb 1, 2020
KingCudi:

Honestly sounds like this guy is doing something wrong. As someone who recently went through a lateral associate recruiting process I actually found plenty of opportunities. Granted it may be different given I was already employed at the time, but I still have a hard time imagining his process and interviewing are flawless.

Sounds like he is severely limiting himself, probably only interested in more senior-associate roles and then only looking at RE. That's not a huge pool. There is no way this guy is such an RE industry vet that he can't look elsewhere, I have known plenty of associates who go to other groups or banks that focus on completely different industries. I have also known plenty of VPs and even MDs who have done something similar. The industry is an easier thing to learn than the process and general working dynamics, and if banks don't want someone with RE experience they just won't look at you - so I don't understand why you wouldn't be applying for those.

The fact that he can't get his head out of his ass enough to realize he needs to widen his net likely speaks to a broader ineptitude in terms of basic reasoning and awareness. His irrational selectivity is probably coming through in the way he presents himself, and turning a lot of people off. IB likes hunger, and some <30 yr old who has an MBA and thinks his failure within a BB environment earns him anything does not scream that. It actually sounds like the opposite - someone who is expecting a lot and going to perform at a low ceiling.

Somebody who's so 'screwed' that, after 5 months of unemployment, they have to look at consulting and corp dev jobs (and god forbid they be outside of NY) needs a dose of reality, and to realize they should be lucky enough to have anyone paying them.

Agree with this, guy needs some tough love.

Real Estate IB can really pigeon hole you and the groups across the street have significantly fewer slots vs. say TMT/Industrials/HC, etc. If the RE group was also attached to something broader like gaming/lodging he may have a decent story to move to media or something similar.

He should use this as an opportunity (before getting to VP+) to switch to a a different industry where he'll develop more skills. The problem with RE IB groups is that often times the work you are doing (merging two REITs for example) is very different than investing in real assets so your exits to other real estate jobs are more limited than you think.

I'd advise him to do one more year as an associate to 'prove himself' to the new bank and position himself to be a VP. Do a broader industry search - you don't need to be an expert. Just have a compelling rationale for wanting to switch to that specific industry and spend a couple days looking up recent deals, understanding the comps sets, etc. and you'll sound plenty smart for a 30min interview.

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Feb 2, 2020

Agreed; I guess that's the risk with coverage groups; skills are transferable but deal knowledge not so much.
He tried to reach out to contacts in energy groups but that kind of M&A is very different from RE.
I guess people in product IB groups have it easier than coverage groups to lateral and get re-hired ? I imagine laid off associates in M&A or LevFin product groups don't stay on the job market for very long at all.
Btw he did update me recently that he was again among the 2 finalists in an interview- this time for a VP at a much smaller BB but still came up empty.
I'm gonna tell him it might be best to take a pay cut as a lower level associate somewhere just to re-prove himself for VP as one option.

Feb 2, 2020

He needs to hire you as his life coach! Getting fired was a slap in the face for him but I think he still doesn't quite get it. Maybe he's just not cut out for banking; maybe he never was.
He's a passive personality in an environment of killers.
My girl just told me I don't need to worry about losing my job in banking like my buddy did b/c my personality fits with banking; his doesn't.
But I guess banking has a lot of these types of people? Smart, great school pedigree, but don't have the spine to push back, confront issues head on, speak the F up?

Feb 7, 2020
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Feb 7, 2020