The problem with having narrow skills, like being able to structure CDOs, is that if you lose your job, your employment prospects are limited. Unless you have personal connections that are willing to give you a chance at something where your skills might be distantly relevant (say being the CFO of a small company), most employers, especially large companies, want to hire someone who is already doing precisely what the job calls for. I’ve seen enormously talented senior people (and I don’t mean from Wall Street) unable to land jobs because employers write the job specifications so narrowly.
Recall that in the dot-com bust, those who lost jobs in Silicon Valley faced similarly bleak situations, and stories abounded of principals of failed companies seeking work at the likes of Home Depot.
It is hard to be sympathetic with people who made so much money in the fat years. Nevertheless, naivetee, optimism, peer pressure and (of course) big bucks lead young people to chose these high paying careers and not consider how risky they are. Even though Wall Street’s cyclicality is well known, many assume the cuts will happen to someone else, and if something bad were to happen, they could always find a job on the buy side. They are learning otherwise.
As Bloomberg reports, many former masters of the universe are looking far afield for there next gig:
Wall Street professionals are trying new careers, and fetching smaller salaries, amid the elimination of 76,670 investment jobs in the Americas following the global credit crunch that started a year ago, according to data compiled by Bloomberg.
Bankers are “buying businesses for themselves, moving west or to Europe, including Russia, or to Dubai,” said Jeanne Branthover, managing director of Boyden Global Executive Search in New York. “They’re also moving totally outside what they do, buying a retail store or a ranch.”
“The job market is in the worst, most chaotic state I’ve ever seen it in fixed income,” said Michael Maloney, who recruits finance professionals for Maloney Inc. in New York. “I’ve been doing this for over 30 years and I’ve never seen anything like this.”
Half the people working in debt sales, trading or research in New York at the beginning of 2007 will have been fired by the end of this year or won’t get a bonus, Maloney estimated.
Jeff Salmon said job jitters prompted him to swap investing in asset-backed securities at Bank of New York Mellon Corp. for keeping the books at a hair salon. He and his wife, Olga, opened a Great Clips franchise in Mercerville, New Jersey, that offers $12 haircuts for both men and women…..
Traders and bankers who leave finance can expect to earn a fraction of what they used to make. Compensation for employees on Wall Street averaged $399,360 in 2007, compared with $62,390 for New York City jobs outside the securities industry, according to the state comptroller’s office…..
Bond salesmen and traders are trying everything from bartending to real-estate sales to make insurance and tuition payments for their families, Maloney said.
“I know a few guys that started gambling, playing poker to pay the bills,” he said. “Especially ex-traders.”
Joshua Perksy took to the streets after being laid off as an investment banker at Los Angeles-based Houlihan Lokey. He strolled New York’s Park Avenue in June wearing a sandwich board reading “Experienced MIT Grad For Hire.”
“It’s been slow and frustrating,” said Persky, 48. “The only places to turn are hedge funds and boutique banks. I’ve never been unemployed this long.”
While his gambit generated some job leads, none has panned out so far, Persky said. He’s considering a move to Omaha, Nebraska.