On Wall Street, layoffs are a way of life: NPR
Emma Alexander was recently fired from Goldman Sachs, along with more than 3,000 other employees. Although layoffs have been unusually large this year, they are an ever-present prospect for people working in finance.
Allison V. Smith
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Allison V. Smith
Emma Alexander was recently fired from Goldman Sachs, along with more than 3,000 other employees. Although layoffs have been unusually large this year, they are an ever-present prospect for people working in finance.
Allison V. Smith
Days before Goldman Sachs laid off more than 3,000 employees, Emma Alexander and her colleagues were feeling nervous.
News of the layoffs’ arrival had already leaked, and anxiety in Goldman’s global offices was high.
Then Alexander received a message from his boss, asking him to come to the conference room.
“And I was like, OK, great,” she recalled. “I guess that’s me. I guess it’s happening right now.”
Twenty minutes after meeting her boss, Alexander returned her badge and she left her office in Dallas for the last time.
She had been swept away by the biggest round of job cuts at Goldman since the global financial crisis. The famous bank laid off more than 3,000 employees last month.
The fast pace on Wall Street
It was not Alexander’s dream to work in banking. She was a sociology student with a master’s degree in public policy.
Alexander says she took the first job she could get after graduating in 2020, just as the pandemic was starting to spread. But she learned to love the fast-paced, competitive culture of finance.
For Alexander, getting cut was a crude introduction to another fact of life on Wall Street: layoffs.
Few industries are more prone to layoffs than finance, where a bad year in the markets — or a poor performance review — can mean you’re out of a job.
According to a 2021 report from the New York State Comptroller’s Office, the securities industry has experienced job losses in 13 of the past 30 years when data is available, nearly once every both years.
When your work is linked to the performance of the markets
Like its rivals, Goldman Sachs has navigated a difficult environment, with high inflation and rising interest rates, and uncertainty about the future of the US economy.
Michael M. Santiago/Getty Images
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Michael M. Santiago/Getty Images
Like its rivals, Goldman Sachs has navigated a difficult environment, with high inflation and rising interest rates, and uncertainty about the future of the US economy.
Michael M. Santiago/Getty Images
Getting cut is part of an understood but unwritten rule, according to Wall Street employees: Pay is high — a first-year associate at Goldman, for example, earns more than $150,000 a year, not including bonus — but with that compensation comes the understanding that getting cut is an ever-present risk.
“It always happens,” says David Stowell, a finance professor at Northwestern University who has spent most of his career at Goldman. “There are expected to be cutbacks every year at most Wall Street companies.”
Still, Goldman’s layoffs have been unusually large this year.
Due to high prices, rising interest rates and economic uncertainty, many of Goldman’s corporate clients stayed away and as a result, the Wall Street company’s earnings fell dramatically. spectacular.
The performance of financial companies is strongly linked to the performance of the markets, as is the fate of its personnel. It’s a reality on Wall Street that can be frustrating when it comes to layoffs.
“Financial markets are unpredictable and cyclical,” says Stowell. “So you live and die with the markets.”
The performance review
Under Goldman Sachs CEO David Solomon, the company’s workforce had grown significantly. Earlier this month, Goldman laid off more than 3,000 employees.
Patrick T. Fallon/AFP via Getty Images
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Patrick T. Fallon/AFP via Getty Images
Under Goldman Sachs CEO David Solomon, the company’s workforce had grown significantly. Earlier this month, Goldman laid off more than 3,000 employees.
Patrick T. Fallon/AFP via Getty Images
But the larger-than-usual layoffs announced by Goldman this year also marked the return of another facet of Wall Street life: annual performance reviews.
On Wall Street, they are notoriously exhaustive and consistent. These assessments are used not only to determine the amount of your bonus, but also to determine whether you will keep your job.
Every year, bankers are evaluated by their peers, bosses and subordinates. The company measures how much money they made and how well they worked with their teammates.
Underperformers are regularly fired. This makes performance appraisal an extremely powerful management tool, according to Stowell.
“In my experience, a little fear is good,” he says. “It motivates you to do better.”
it still stings
In 2016, John Gooden was part of a series of layoffs at Bank of America. “They were part of life,” he says. “I just didn’t think at the time that it would have been me.”
Courtesy of John Gooden
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Courtesy of John Gooden
In 2016, John Gooden was part of a series of layoffs at Bank of America. “They were part of life,” he says. “I just didn’t think at the time that it would have been me.”
Courtesy of John Gooden
The prospect of getting cut can be something employees live with, but when it happens, it always stings.
John Gooden learned that lesson in 2016, when he was a second-year associate at Bank of America.
One September, while on his way to the office, he learned that his company had started laying off workers. A few hours later, Gooden suffers the same fate.
“I was completely taken aback,” he says. “It kind of took my breath away, and I didn’t really know what to do.”
Gooden remembers staggering around the office and saying goodbye to a few members of his team. He did some introspection. Next, Gooden began calling his contacts and sending copies of resumes.
“After you heal your wounds a bit, you have to get back to it,” he says. “Especially me. I had a family to support.”
Gooden got back on his feet, and six years later he is still working on Wall Street.
Bounce
Emma Alexander never dreamed of a career in finance, but she quickly fell in love with her job at Goldman Sachs.
Allison V. Smith for NPR
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Allison V. Smith for NPR
Emma Alexander never dreamed of a career in finance, but she quickly fell in love with her job at Goldman Sachs.
Allison V. Smith for NPR
Alexander also remembers being “in shock” after her supervisor told her she was released.
“I took it pretty badly,” she says. “I was quite upset.”
Alexander estimates that the whole ordeal lasted about 20 minutes. She had a brief meeting with her team, then she was escorted out of the building. Alexander did not have time to finish the e-mails she was writing, and she could not deliver the work in progress.
The following days were difficult, she says. Today, she’s applying for jobs in finance, pondering what might come next.
“I’m into it now, and I love it,” she says. “But I’m also wondering if maybe I should take some time off and think about going back and doing something that maybe I studied and went to school for.”
Today, Alexander is still looking for a job – open to the possibility that he won’t be on Wall Street.
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