Where Will All the Bankers Go?

With Wall Street imploding, swelling hordes of displaced financial-services workers face corporate disinterest and a bleak employment outlook.

The tidal wave of bad finance news is freezing credit availability and battering investment portfolios, but a more human toll is almost certain to follow.

In the financial services sector, which already has pared more than a quarter-million jobs since the beginning of 2007, new rivers of displaced workers from Lehman Brothers and Merrill Lynch will cause a job-market flood that Corporate America cannot absorb, and would not even if it could, according to executive recruiters.

Even the news that Barclays Bank could save as many as 9,000 jobs by buying many of Lehman’s core assets won’t do much to lessen the ensuing job-hunting chaos. Even those Merrill and Lehman bankers lucky enough to find a berth at the remaining investment banks are likely to displace younger, less experienced workers. “People are running into each other for the few available positions — it’s a real game of musical chairs, and there’s far from enough seats,” said John Challenger, CEO of Challenger, Gray and Christmas.

Jo Bennett, a partner in the financial services practice at Battalia Winston, said even more pointedly, “The impact to the job market will be terrible. I wasn’t alive during the Great Depression, but other than that this will be the toughest job market [for financial services] in history.”

The most optimistic assessment was offered by Richard Dowd, president of Dowd Associates Executive Search in White Plains, New York, who said, “We don’t have a clue what’s going to happen. Over the 20 years I’ve been in business, none of us [recruiters] has seen what we’ve seen in the past 10 days. It’s very hard to predict what will happen or what it means.”

But it seems likely that in any scenario, many traders and other types of finance professionals who lose their jobs at investment banks will have to dig deep to reinvent themselves by starting their own businesses. That’s because while some may land at other investment banks, few will move to the corporate side, the headhunters told CFO.com.

According to Challenger, Gray and Christmas, financial services firms announced about 103,000 job cuts this year through August, following a record 153,000 in 2007. Recently the pace appeared to have slowed down considerably, with only about 2,200 cuts announced in August. Now, a violent upswing appears to be around the corner.

But corporations typically are reluctant to hire investment bankers. “There is no question about their technical skills,” said Dowd. “One concern is, ‘Will they be happy here?’ A couple of my clients have interviewed some of these people recently, but it’s very difficult to get them over the hump. They’re thinking, ‘Will they just stay until the market turns around?’ “

Even more damaging to investment bankers’ prospects of landing corporate jobs is their often-flamboyant styles.

“You can tell just by talking to someone whether they will fit in,” Dowd noted. “There are a lot of well-educated, smart, incredibly talented people in investment banking, but sometimes they are quite taken with themselves.”


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