Morning Coffee: 'Weird vibes' at Goldman Sachs as Blackrock turns to cuts too. JP Morgan associate's archetypal dating email
It's the morning after the day before at Goldman Sachs, and the finance gossip sites have been buzzing with stories of bad news and hard feelings. There was a 'weird vibe' at Goldman yesterday according to a post on Instagram site Litquidity: almost every team was affected and everyone was on edge. Business Insider spoke to people with war stories from the consumer banking team: "Every 10 minutes, I just kept hearing that someone was being let go," said one employee. Some who were chopped were semi-glad of it. - "I've put in some crazy hours," another woman told Business Insider. "This is a very hectic and highly demanding environment. It's almost like good riddance, maybe."
Goldman juniors seem to have had a particular shock. Since all redundancies were suspended during the pandemic, almost none of the analyst classes are likely to have seen performing employees let go at all. The population that’s never seen an exercise of this type could stretch well up into the Associate ranks, and even potentially include quite a few Vice-Presidents.
For the older hands who have seen this sort of thing before – for whom the phrase “Reduction In Force” doesn’t just mean an episode of “Industry” – there’s a sort of understanding of the mechanics. When thousands of people have to be given the bad news, and each one of them has to receive it face-to-face, then the meetings are always going to have to be short and impersonal. At the end of the meeting, the unlucky employee does have to leave the building immediately, particularly on a trading floor.
These things seem a bit heartless and impersonal, but it’s literally the only way of getting the thing done without having it drag on for days. And although few of the newly unemployed are likely to be in a mood to hear this, it’s not exactly fun for the managers on the other side of the desk either. It's weird and shocking to see friends and colleagues let go when they were doing a reasonably good job, but this is the reality of working in a cyclical industry.
It's not just Goldman. Anyone with fewer than four years’ experience at BlackRock is going to be seeing their first round of layoffs too, apparently – there will be 500 jobs cut in the coming weeks, roughly 3% of the workforce. Speculation has already begun about a number of other investment banks, and much of it is likely to turn out to be correct.
And on the day it happens, there will be unavoidable unhappiness in the office. All that one can do is try to treat people well oneself. The greatest truth in this industry is that “what goes around comes around”, and people have a habit of turning up again, often in jobs which bring them face to face with former colleagues. People are likely to remember who reached out to them, who arranged to meet up for a coffee or a drink. On a day of general bad vibes, spread a few good ones.
Elsewhere, people monitoring the day’s bad news on Twitter were given a bit of light relief when the markets correspondent of Yahoo Finance reminisced about her experience of trying to date a JPMorgan associate last year. In the early months of 2022, before the deals dried up, things were pretty chaotic for junior bankers, particularly if they wanted to have any sort of social life. But rather than cancel the date when a transaction was announced, this … hero … decided to carry on, but to give “a heads-up” that he would have to dial into a conference call during dinner, “hopefully quite short”.
Surprisingly, the date went ahead, and the banker was indeed on a call for the first half of it. Sadly, he turned out to be “insufferable” afterwards, but arguably the relationship was doomed anyway. The trouble with being in listen-only mode on a first date, particularly for an investment banker, is that it sets up wholly unrealistic expectations for the future.
It looks as if Jes Staley’s quest to clear his name is going to take a while longer. After resigning from Barclays after an investigation into his relationship with Jeffrey Epstein, he is now facing the discovery of “approximately 1,200 emails” in a lawsuit the US Virgin Islands are bringing against JPMorgan. His lawyer wants to “make it expressly clear that our client had no involvement in any of the alleged crimes”; JPM says the same. (Guardian)
Bonus season for the US bulge bracket starts today with Citi and JPMorgan, and ends on January 25 when Bank of America gives numbers. The amounts are likely to be disappointing, although in the current environment people might be happy to get anything. (Business Insider)
Sam Bankman-Fried is still giving interviews in his parents’ “unostentatious $4m house”. He’s playing video games, monitoring Twitter and generally going out of his mind with boredom. (Puck)
Robyn Grew, the president of Man Group, once sat in a meeting with a lawyer who refused to speak to her, asking all the questions of her male junior employees. This was apparently a lot more embarrassing for them than it was for her. (Financial News)
If you mainly use LinkedIn to keep track of scammers for your short-selling fund, remember to be polite to them, or you may get your account suspended. (AFR)
Not so long ago, SPAC bankers were the hottest stars in the firmament. Now, the deals are falling apart, sponsors are losing their money and angry investors are beginning to lawyer up. The trouble is apparently that these deals always relied on the “promotional” skills of being able to convince people that a cash shell could add loads of value to an operating business, and it just isn’t that sort of market anymore. A former senior BoA banker and a former SEC lawyer argue that it’s all going to get a lot worse. (FT)
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