Wall Street Job Losses Approach 40k
During the downturn of 2001-’02, Wall Street shed approximately 90,000 jobs. The bodycount is approaching 40,000 in the U.S. this cycle, with more to follow. Some areas like fixed income are getting hit harder than others, and the pain is spreading to London, which is girding for losses in the 20,000 range.
Headhunters are so busy they are not picking up the phone, and might actually turn out to be beneficiaries of the turmoil.
There is opportunity in the chaos; go out and find it!
UBS Layoffs to Hit Fixed Income Professionals
Originally Published In the News April 15 2008 10:15 AM
Status symbols on Wall Street have long consisted of things like corner offices and Italian supercars, but soon a mere paycheck might do the trick. UBS is the latest to cut the ranks, and fixed income professionals are likely to feel the bulk of the pain:
UBS AG told the leaders of its investment-banking unit to ready job cuts of 10 percent ``across the board,’’ CNBC reported, without citing anyone.
The Swiss bank’s fixed-income department may be among the hardest-hit by the cuts, CNBC reporter David Faber said.
UBS Chief Executive Officer Marcel Rohner said during an April 1 conference call that the company would decide how many jobs to cut within a few weeks.
The investment bank, which had about 20,000 employees at its peak, cut 1,500 jobs in the third quarter, the financial news network said.
UBS spokesman Serge Steiner told Bloomberg News the bank is sticking to its April 1 statement that staff numbers in the investment bank ``will continue to be adjusted in line with market developments.’’ UBS plans to give more details on job cuts in early May, he said. Bloomberg
It is ugly out there.
UBS Set to Cut 10% of Jobs at Investment Bank
Bloomberg
Double Dip Coming to Some Bear Staffers
Bear Stearns staffers are in the process of figuring out their future, but you do not have to be retained by JP Morgan to win.
I know of one employee who has averaged 250k at Bear over the past two years; he recently received his bonus and has a guarantee from Bear that will pay him 500k over the next year even though he is out the door.
Currently negotiating for a new position that will pay him around 400k, all in, he will approach his first million dollar year at age 30, not a bad deal all things considered.
Of course not everyone will make out like a bandit; but at least those who stay at JP Morgan now know where they stand:
JP Morgan will offer a three-year stock retention package to those Bear Stearns staff it wants to persuade to stay, based on their bonus for last year.
Most Bear Stearns staff will find out by the end of this month whether they will have a job with the combined bank, and those who are offered jobs by JP Morgan will receive packages that vest over the next three years, with 50% vesting after two years and the remainder after three.
Many of the staff at Bear Stearns receive a higher proportion of their bonus in stock than at other Wall Street banks, and the bulk of these payments will have been wiped out after the near-collapse of the bank and JP Morgan’s $10-a-share offer.
The details of the retention packages are contained in the internal merger document between Bear Stearns and JP Morgan, according to a person who has seen it.
The terms of the package are the same as those offered to the majority of JP Morgan staff as part of their share compensation and shows how fast the bank is moving to integrate its investment banking business with that of Bear Stearns.
Bear Stearns’ top-paid bankers who received over $5m (€3.2m) last year, are not covered by the offer and will, if retained, have to negotiate individual deals with JP Morgan.
According to a headhunter based in New York, some high-earning staff have been offered a so-called “cliff vest” that will only allow them to receive their shares after five years. The offer was a blunt attempt to keep the best performing staff at the firm, he said.
JP Morgan has already begun offering jobs to those Bear Stearns staff it wants to keep, and most employees will know by the end of the month whether they have a job or not. Those made redundant will receive nine months’ salary and one third of their 2007 bonus in cash.
Bear Stearns declined to comment. Financial News
Collecting two pay checks at the same time, the fabled double dip, is as good as it gets on Wall Street.
Gasparino on Bear Layoffs
JP Morgan offers three-year package to Bear staff
Financial News
The Highest Paid People on Wall Street
I used to pride myself on knowing something about everyone in NYC running more than $1 billion. But Times are a 'changin, and there are now too many funds to keep track of.
But there are some old timers on this year's list of the top earning money managers on the Street. I don't think Dan Loeb or William von Muefling would claim that 2007 was a vintage year for them, but they pulled in around $250 million all the same. Och-Ziff (OZM-NYSE) was better known for its IPO than the numbers it posted; but pencil Dan Och in for $300 million last year, along with a liquidity event than he will certainly remember the rest of his life.
Of course, public shareholders of Och-Ziff did not fare so well; the stock continues to probe 52-week lows as the BuySide scratches its head and attempts to assign the appropriate valuation to the shares. Any Alternative Asset IPO's that can get priced in 2008 should trade at a discount to Och-Ziff, assuming the bankers can get them done. Perhaps selling a stake to Lehman or Goldman is more realistic than going public, however, for managers looking to monetize their stake.
T. Boone Pickens was probably the oldest member of the list, and Chase Coleman, at 32, the youngest. The young pup pulled down $350-$400 million, and out earned Pickens by about $50 million.
The other notable takeaway is the preponderance of heavyweight from Texas. Everything is indeed bigger there, and Equities in Dallas, once shunned, have pushed aside Denver and San Francisco as home to some of the biggest firms on the BuySide.
Moelis: M&A Bubble Will Leave Blood on the Street
Ken Moelis, who left UBS’s NYC offices to set up his own boutique in Los Angeles, is calling for more blood to flow at the bulge brackets as the M&A bubble pops:
Kenneth Moelis, the former president of UBS AG’s investment bank, said Wall Street firms may have to eliminate as much as 35 percent of employees as leveraged lending dwindles and the pace of mergers and acquisitions slows.
``The Street got staffed up to support what was a slight bubble in M&A,’’ Moelis, 49, said in an interview on Bloomberg Television today. ``You’re going to see a significant retrenchment.’’
Moelis resigned from UBS, Switzerland’s largest bank by market value, a year ago and now runs Moelis & Co., an investment banking boutique. Some of the largest financial ``conglomerates’’ may break up as Wall Street shifts focus from lending to its clients to furnishing them with strategic advice, he said. Wall Street banks hit by mortgage losses and writedowns have cut more than 34,000 jobs in the past nine months, the most since the dot-com boom fizzled in 2001.
``They’re going to have to go back out and remember that their client is a relationship, not a counterparty,’’ said Moelis, who is based in Los Angeles. His clients include Yahoo! Inc., which rejected a $44.6 billion buyout bid from Microsoft Corp. in February. Bloomberg
Ken quit worrying about the Street, and give Yahoo! a little advice that will make you some money.
Like, Sell.
Moelis Says Wall Street Banks May Be Forced to Cut 35% of Jobs
Bloomberg
-----------------------------------------------------------------------------------------------------------------------
The content contained in this blog represents the opinions of underthecounter. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.
