Thousands of people are losing their jobs on Wall Street — some before their first day of work:
Since August, the financial industry has shed more than 38,000 jobs as a result of the credit crisis and the collapse of Bear Stearns. Citigroup added to the misery on Friday, saying it would eliminate 9,000 more jobs. No one thinks the pain will end there.The angst is most acute at Bear. Many of its 14,000 employees are expected to lose their jobs in the coming months. JPMorgan is running what its chief executive, James Dimon, has called a “military operation” to decide which employees at both banks will stay and which will go.
For now, many of Bear’s might-have-beens say they will keep hunting for jobs on Wall Street, where the typical new college graduate earns a starting annual salary of $80,000 or more, plus bonus.
And JPMorgan is offering the student recruits consolation prizes, provided they play by its rules. They can keep hefty signing bonuses that Bear promised them — $10,000 for college seniors, and about $50,000 for M.B.A. students — if they sign contracts in which they agree not to sue the bank over their rescinded jobs. If they do not sign, JPMorgan says, they cannot keep the money, which many of the students received last fall.
JPMorgan is also offering to let the students use its career counseling center, where they can hone interview skills and brush up résumés. The bank will pay students who accepted summer internships at Bear Stearns, putting some to work in its own divisions and others to work at charities.
Before disaster struck, Bear Stearns — one of the most prestigious employers in campus career offices — signed on about 300 undergraduates and M.B.A.’s for full-time positions and about 300 interns for the summer. But those offers were thrown into question in March, when the 85-year-old company, undone by what amounted to a bank run, agreed to be acquired by JPMorgan in a controversial deal brokered by the federal government.
The students’ fate depended on which corner of Bear they were going to join. Those who had signed on in the equities, banking and fixed-income divisions generally lost their jobs. Those who had joined in the energy, prime brokerage and merchant banking division will go to work for JPMorgan.