Goldman Sachs and Morgan Stanley have announced plans to eliminate hundreds of employees, UBS and Credit Suisse are reportedly preparing to cut thousands of jobs and Barclays Capital has already imposed two rounds of layoffs this year.
But as banks again resort to pink slips, they appear inclined to spare the most generously compensated executives -- the people who enjoyed the biggest gains from the bubble in mortgage-related investments that savaged the economy -- while instead dismissing less-expensive employees.
"Wall Street is a cutthroat business. That's how the capital market system works," said Sung Won Sohn, a former Wells Fargo chief economist who is now a finance professor at California State University Channel Islands. "The more seasoned, experienced, higher-paid people have a lot more connections and contacts. That is very, very valuable. Whereas junior, younger people are more replaceable."
In June, Barclays Capital cut employees, including first-year analysts who had been hired last year out of college to work in the New York investment banking division, a person familiar with the situation told The Huffington Post. Morgan Stanley released plans earlier this year to lay off up to 300 workers in its retail brokerage, including trainees. At Goldman Sachs, employees losing their jobs will include "junior people," the firm's chief financial officer said during a conference call this week.
But being seasoned doesn't provide a job guarantee, either. In the end, the decision comes down to the company's bottom line, and whether an employee is capable of fattening it.
"Length of time at the firm doesn't matter, it doesn't help you," said Kim Woodle, 54, who was laid off from his job as a computer programmer at Morgan Stanley in 2009, in the midst of the Great Recession.
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