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In the City, technical competence is taken for granted, sometimes wrongly. It’s regarded as a commodity that can be bought by the yard, a bit like the people who provide it. What turns the workforce into individuals who stand out, get noticed, promoted and paid, is the confidence and skill with which they do what they do. Confidence – though not over-confidence – is a key differentiator, and it can be the first casualty when the horrible axe of redundancy falls.
Having lived through several down cycles in the Square Mile, and seen friends and business associates apparently randomly taken out and shot, I’ve become cynical both about why people get fired and what to do when it happens.
The only certainty that traditional investment banks had at the start of the new financial year was their overhead. The chief operating officer might beat up all the teams to produce probability weighted forecasts of deal revenues, but everyone knew that if reality matched the forecast, it was an accident. Most firms went the integrated route, thinking to build in diversity and even quality of earnings – yes, really – by running trading books, taking positions, getting into asset management, and generally taking initiatives – management-think for activity which is actually a goal in its own right, regardless of what it achieves.
In fact, the investment banking industry, which holds itself out as a source of advice for other industries at critical points in their development, is itself about as badly managed as any of its clients, although it does have the edge on most of them when it comes to presentation skills and logical argument about whatever is its latest money-risking, bonus-generating wheeze.
So when things go wrong – and just lately they’ve been going terribly wrong – the greedy, impatient, short-term orientated individuals running the firm do what comes to them instinctively. They take greedy, impatient, short-term action.
What this means in practice is a first round of belt tightening – junior members of the firm flying at the back of the plane, staying in cheap hotels, not being allowed to charge taxis home at night, while the senior people, who are the real big spenders, show leadership by carrying on as before.
The next stage is shedding people. Once again, the axe rarely falls on senior people, who have been around a while and are part of the club, but on the junior ranks, where firing 10 people may save the same as one under-achieving managing director, but at least the impression can be created that a lot of activity is under way, that things are happening and management is being decisive.
The third stage is exiting whole business areas, with ethnic cleansing of entire departments, regardless of talent, ability or hard work.
The key point about all three stages is that they are unfair. Words like random, arbitrary, ruthless and thoughtless spring to mind. There is no covenant to ‘look after your people’. People are a commodity and commodities get traded.
But therein lies hope. Having seen confident, successful, exuberant people walking out of the office carrying their belongings in cardboard boxes – so much more thoughtful and discreet than bin-liners – and looking diminished by the experience, shocked and surprised and bewildered, the lesson I take away is that however hard it seems, you mustn’t allow it to matter. If you do, you risk becoming unravelled, and without confidence you won’t bounce back.
Of course it’s unfair. But keep your perspective and see it for what it is. It’s a casino, and not just any casino. We’re not here to play the slots. We’re in the high stakes room playing roulette. It may be random, it may be arbitrary, but we don’t complain when we win.
And when we lose, which everyone does from time to time, accept it and bounce back. You haven’t necessarily failed. Your firm, your boss, your team may have hit the rocks. Maybe it was the market, which is bigger than any of us. But you are still in the game, and in the long term that’s what matters.
David Charters’ latest book, The Ego Has Landed, is published by Elliott and Thompson, price £9.99.
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| Related Articles: |
| The Outsider: PC madness | | Now fund managers are cutting staff too | | The Outsider: The best advice is to be nice |
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| Date: |
06 Jun 2008
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| Name/Email: |
Henry ()
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| I definitely disagree with this article. The vast majority of the time, and particularly this year, the people who got fired were underperformers, it was not just 'random'. The only time this isn't the case is if you have 1 person doing a specific role and they are no longer required however good they are. But most of the time you have x number of people on a desk, of which a certain % are to be laid off, and its always the worst performers who go. Yes there's a seniority bias, some firms axing the grads, most the seniors, but even there there'll always be other people of same/similar seniority who are saved. Why is that? Why are there so many people who've kept their jobs at the same firm for decades of cycles? Because its very easy to sustain your employability and ensure you don't get fired. The main way to do this is by doing something which the firm finds extremely useful and you're the only one who does it (whether you have the expertise or can be bothered) - just something simple like a weekly wrapup or innovative way of looking at things. And then there's being likeable by the people who count - senior mgmt and clients. Have all that and you're indispensible, period. |
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| Date: |
06 Jun 2008
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| Name/Email: |
Redundant ()
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| I would have to disagree with Henry. I think this is an excellent article.
Having just been made redundant myself it does help to put the situation in context. I would not describe myself an under achiever - I went to a good university (one which Henry might approve of) and have a number of professional qualifications. Unfortunately I am a junior and expected to shoulder the blame for my managers - it's incredible that managers are willing to lie even when you have a clear email trail showing mistakes were generated by them and not you. However, it is the nature of the beast - they know they can get away with it because it you complain they simply damage your professional reputation and tell you that you will never work again in the City so it is better you go quietly. My mangers have mortgages in excess of a million where as mine is significantly less, so it is rationalised I am young and can find another job, I don't have a family to support unlike them.
I would like to thank David Charters for writing this article. It's great when people write honest accounts of City life. |
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| Date: |
06 Jun 2008
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| Name/Email: |
Anon ()
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| BS Henry! This article has many elements of truth. I am a former grad that took voluntary redundancy at a Tier 1 IB recently and left on good terms. No, i wasn't underperforming but i am a young black female that was seen as a threat to my managers who just liked the status quo. It's so ironic when i look back now because I was so proud to get in and slaved away until all that good energy was nearly zapped out of me.
It's the old boys club mentality that I can't stand in the city - that's the problem. It was a tough decision to take voluntary redundancy but it was time to leave this rat race and I am happy - not ashamed! |
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| Date: |
06 Jun 2008
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| Name/Email: |
Henry ()
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| Company: |
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| Redundant, its people like you on this site who think just because they have "a number of professional qualifications" it makes them any good in the workplace. I have a 3yr bachelors only and am outperforming MSc PhD CFA MBA types. From what you said, it seems you could have very easily saved your job. If you'd come across (a) useful/indespensible and (b) likeable to your seniors, they wouldn't have fired you. Shifting the blame onto juniors is extremely common, especially in Corpfin/IBD, but they never fire them if they're deeemed indespensible. Bottom line - if you make someone's life easier and are an asset so it would cause problems if you left - which for a grad is very easy just using some innovation to do a basic/admin thing well - you wouldn't have been canned. Why were other people around your level saved yet you were canned, always think about that. |
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| Date: |
06 Jun 2008
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| Name/Email: |
Henry ()
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| Company: |
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| Anon, that is the most pathetic thing I have ever heard. You're blaming taking redundancy on being a "young black female"? You do realise that that is considered one of the most UNFIRABLE positions to be in, in this politically correct day and age where people are too afraid to can someone on grounds of discrimination? Carry on blaming your failures on being a "young black female" whilst plenty of other "young black female"s I know are doing extremely well for themselves. |
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| Date: |
06 Jun 2008
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| Name/Email: |
Wonder woman ()
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| Company: |
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| The fact that all the people in agreement with David Charters have already been made redundant is saying something. Looks like the losers are taking refuge in the belief that good people are getting dumped to try and make themselves feel better. Could it be Henry is right? |
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| Date: |
06 Jun 2008
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| Name/Email: |
Bored of Henry ()
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| Do you think if everyone just agreed to ignore Henry he would disappear :-) That could only be a good thing! |
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| Date: |
06 Jun 2008
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| Name/Email: |
Yawn ()
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| Company: |
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| I'd rather keep Henry and have everyone agree to ignore David Charters!
Yes he probably has a very good self help book to help people cope with the strain of redundnacy, but I'm sick of seeing adverts for it on this portal every other week!
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| Date: |
06 Jun 2008
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| Name/Email: |
Anon ()
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| Company: |
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| Good people that are seen as threat to seniors are usually fired! Banking has the worst management I have ever seen. I've not been fired but I have seen very good guys fired and the director is now scrambling around getting 4/5 people to figure out how to do a VP's daily workload. The VP was by all consensus a damn good one. |
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| Date: |
06 Jun 2008
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| Name/Email: |
PJ ()
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| Company: |
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| There is some element of truth in Henry's statement, but the article is also generally good. I have seen many v.good people made redundant, despite being top class performers. The reasons can range from selfishness from more senior people, who may feel threatened, to bad "political acumen" in the workplace by those been made redundant. It is fair to say though, that if you make yourself indispensable you have a better chance to survive, but it is by no means an easy task, and often requires a certain degree of luck. |
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| Date: |
06 Jun 2008
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| Name/Email: |
Hotshot ()
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| Company: |
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| I agree with the article, redundancy doesn't necessarily indicate people's ability. There is a lot of randomness, office politics and settling of scores. JPMorgan's selection of Bear people was puzzling, if Jamie Dimon wanted the best person for the job in each position then spending half an hour max with Bear people is an odd way to go about it. |
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| Date: |
06 Jun 2008
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| Name/Email: |
MortgageGuy ()
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| Company: |
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| Thinking lay-offs are uniquely correlated with competence is a sign of a lack of experience of the real world. Performance and competence are a factor; more important is politics and being part of the club. |
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| Date: |
07 Jun 2008
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| Name/Email: |
MrsPiggy ()
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| Company: |
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| I agree with MortgageGuy. I have been issued with redundancy which I am appeaing against because it is frustrating to know that there are grossly incompetent senior people still working in the company. It is a matter of principle, I know my worth and I had an excellent track record as an employee, so I will not accept redundancy. Companies should sack people who are lazy, cant learn, who are narrow minded bigots with no mind of their own who follow senior management ideas blindly without challenging anything....Redundancy is a form of dismissal and if you feel you have been unfairly selected you are probably right so challenge your employer.... |
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| Date: |
09 Jun 2008
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| Name/Email: |
hanging in there ()
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| Company: |
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| Everybody who has been through 2 downturns or more knows that Henry's statement is showing an understandable lack of experience and how the city operates.
Every year there is a bit of a clean out at the bottom end of 5-10% every year. At least at the places i have worked (no i have not been made redundant). These are not necessarily people less smart than the rest.. the mostly did not fit in, did not get along with senior management or (most cases) did not really care as they had enough anyway.. and went off to better things..
However, in situations like this and this time is at least as bad as 87, clearly worse than 2002 - where entire groups are being closed and cuts are reaching 50% and up or in a merger, it is a completely different scenary. It then goes across the board, often related to the cuts at the level above.. and believe once you lost your support - forget it as you have no change next to the chap who still has his buddy in that HR meeting who says, listen we need to keep this guy (important deal, client loves him and all the bull).. so forget about being better or really good.. all that associate stuff is not big science as we all know..
keep it up guys. |
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| Date: |
09 Jun 2008
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| Name/Email: |
John Homes ()
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| Company: |
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| word of advice - don't waste your time and money fighting a redundancy decision. it is easy to get bitter. this time it is different. no one is safe. those pompous asses who make redundancy decisions will be faced with 2 outcomes if they hold onto their jobs in this current environment. 1) staying with the firm and getting stress, high blood pressure and sleepless nights, or 2) eventually getting made redundant themselves. Believe me - by the end of this year, there will be many more people waking up to Jeremy Kyle and thinking "what the **** am i going to do today?" and the chances are it will be those who were behind your redundancy decision. a falling tide exposes us all. |
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| Date: |
09 Jun 2008
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| Name/Email: |
chinny ()
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| Company: |
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| I agree with PJ and yes while David Charters's article is fairly good; I beg to differ in one of his assumptions regarding redundancy - my uncle in a senior position in a large oil company was recently made redundant after over 20 years of experience...can someone explain this to me how such happened and it would really be nice if people could post comments that they have actually experienced or they know people who have rather than bashing other peoples' comments based on hear-say...Judging by what is happening on the Apprentice;anyone can get fired - especially the good people who are seen as threats, not buddies with management , not manipulative,not ruthless, not deceptive etc but the Lees, Claires, Alexs and of course the Helenes usually and sadly survive but I might be wrong but as David said, its not the end of the world and there's the need to get up and fight for survival and of course not being bitter during the whole process.... |
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| Date: |
09 Jun 2008
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| Name/Email: |
anon ()
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| Company: |
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| henry is rubbish.. can we pl get rid of these consultants.. they cant offer a job, they are not in banking and they are full of ****. my mother would offer better advise |
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| Date: |
09 Jun 2008
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| Name/Email: |
pradeepkrish ()
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| Company: |
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| Agree with the article and Henry to an extent. Found the lady claiming discrimination cause she is a 'black female' most irritating. Get a life. |
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| Date: |
10 Jun 2008
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| Name/Email: |
Henry_needs_a_scrub ()
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| Company: |
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| Henry, one day life is going to kick you in the a**, you have been in the industry way too long and your ego is way overblown. Firstly show a little compassion for the people who have lost their jobs. Secondly , to state "the vast majority of time people who got fired were underperformers..." is complete utter nonsense. I have been industry for more than a decade (without being fired) and I have seen many brilliant high performing high revenue generating individuals laid off for very unrational and obscure reasons. On another note, no one is deemed indispensible to these organizations as you mention, however skilled you are, you should be able to realize it yourself with all the examples of high-profile casualties hitting the headlines coming as a result of this current market crisis. Finally, a lot just leave on their own because they are tired of working with immature self -absorbed individuals with your kind of mentality and lack of humility... |
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| Date: |
10 Jun 2008
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| Name/Email: |
Wizard of EC1 ()
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| Company: |
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| I think we all agree that Henry is an inexperienced individual who is looking at his first market down turn - he make think he is bullet proof, the experienced amongst us know he is not. The City is managed on nepotism and politics, competence or performance is difficult to measure outside the Front Office and therefore has little to do with the redundancy decision. Most managers in the City are poor, they plan no more than three months ahead and are staggeringly selfish. The art of survival is to gain and maintain “sponsorship”, generally by being a sycophant, bribery or even blackmail. If you get put on the list – do appeal – it is the only way to throw a punch that will not negatively impact your financial package. Insist that the Appeal is heard by someone “independent”, at least then people outside your bosses’ control may raise questions about his/ her management of the situation and the politics may even become exposed. Your aim should be to damage their reputation. Flood HR with emails and requests, become a pain in the neck – remember, you have time on your hands. Turn up the volume and make noise. Won’t impact the standard deal and well worth landing a punch . |
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| Date: |
10 Jun 2008
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| Name/Email: |
Hanging in there ()
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| Company: |
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| Yeah. Let Henry get on with stuff. He’s busy avoiding redundancy...
Fully agree with wizard, most people underestimate their negotiating power. Remember, although I have never seen a COMMUNICATED decision being changed, (people get put on and off potential redundancy lists all the time - so you may have been closed without knowing), nobody in the world can force to sign anything! They will push and talk nicely, then get rough and nice again etc... Stay cool, time is on your side, and the bank needs to communicate numbers (signatures) more than costs. Being a lawyer by training my advice is being tough, clear and somewhat arrogant. Many however are in shock and give in to have peace - very wrong. The decision has been made. You got all the time in the world to repeat "not enough". A big bank will try to avoid legal actions at almost any price.
There r good news as well. A friend just found a new decent role at a bulge bracket - it was painful but went through in the end.
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| Date: |
10 Jun 2008
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| Name/Email: |
Windy ()
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| Company: |
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| You are all missing the point
I have been made redundant twice and it’s actually a great career choice-work a few years with decent bonus get large redundancy payoff plus last years bonus again (30k of it tax free) , take 6 months off to watch World Cup/Euro championships/ repeat cycle then retire
I am a high performer so sometimes it’s difficult to be made redundant but begging does work. An old boss of mine made redundant from a US IB made so much money in the payoff he retired at 35
Good luck!
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| Date: |
10 Jun 2008
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| Name/Email: |
WindyPayMeOffPlease ()
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| Company: |
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| You are all missing the point
I have been made redundant twice and it’s actually a great career choice-work a few years with decent bonus get large redundancy payoff plus last years bonus again (30k of it tax free) , take 6 months off to watch World Cup/Euro championships/ repeat cycle then retire
I am a high performer so sometimes it’s difficult to be made redundant but begging does work. An old boss of mine made redundant from a US IB made so much money in the payoff he retired at 35
Good luck!
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| Date: |
10 Jun 2008
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| Name/Email: |
Fuppy ()
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| Company: |
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| Henry, having spent 30 years in the City, I have seen a few peaks and troughs and therefore a few clearouts, and I have out lasted them all. I have also been involved in exiting people who made good revenue in a good team, but I was forced to exit them so to ensure the numbers and ratios were met. So I would lose your narrow mindedness if I were you, otherwise the next time I can see your name being top of the exit list ! |
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| Date: |
10 Jun 2008
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| Name/Email: |
Anon ()
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| Company: |
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| As Sir Alan Sugar once described consultants: BUMS! How true!
In the City is is not competence. You would nt have been hired in the first place. It's all about politics and your ability to BS. Have none of the latter two and you're toast sooner or later.
Most senior managers have confidence to the degree of being full of ***** and they usually are. Regulators and shareholders should have a clear overview of what those senior managers actualyy generate and review their pay packagaes accordingly. |
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| Date: |
10 Jun 2008
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| Name/Email: |
testing times ()
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| Company: |
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| Dissmissal vs. Redundancy
During the 1st week of publising exactly where the cuts were to be made in the bank I was working for, as I was the newest and least technically experienced in the team of just over 1 years analyst experience, instead of making me redundant they fired me in that same week.
Management cost cutting excersizes gave some c**p about how I did not meet the standards when my review only 1 mnth ago indicated healthy progress. |
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| Date: |
10 Jun 2008
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| Name/Email: |
Nice Guy ()
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| Company: |
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| The article is very true...... my friend was recently made redundant, he was an over acheiever and handled his job very nicely, he was made to go right before a deal he was handling was going in so that the manager could take credit for it.... managers are ususally worthless the more higher up they are ..... they are in meetings all throughout the day ... no wonder they never get any job done ..... and 80% of meetings are redundant rubbish one can do without ...... the banking industry has gone bonkers and need a good restructuring where people who deserve credit rise themselves and don't need to kiss their managers ass to get it |
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| Date: |
11 Jun 2008
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| Name/Email: |
Billl C ()
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| Company: |
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| writer is correct this is usually how it goes down. Been in the business for 12 years and finally got let go in this the worst of all the downturns I've seen.
I'm a single white male who always got great reviews and my managers liked me (but were not consulted in the firing process) but was the first one out the door (no married persons were fired in the first round in my group with 10 layoffs, no women or people of color were let go either guess I was the politically expiedent choice). As for the black female employee well usually you are politically unfirable so I'm flabbergasted you were - no offense but it must have been for a reason!
The business sucks and these firms simply don't care about you and will do whatever they can to please the street and look like they are doing something - even if it means firing good employees and/or ditching profitable groups |
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| Date: |
11 Jun 2008
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| Name/Email: |
RC ()
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| Company: |
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| I think Carl Marx said "the graveyards are full of indispensable people" People delude themseleves, but there's no such thing. Redundancy isn't that much beyond random as David says. (and no I've never been made redundant ) |
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| Date: |
11 Jun 2008
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| Name/Email: |
Bemused ()
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| Company: |
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| I think it is actually a myth not fact that blacks, asians, gays, women can't get fired for political reasons. There are no statistics to back up the claim. Besides there are still may out of court settlements which obscure the facts. Having a legal background I can assure you it is not easy for a claimant to win a sexual/ race/ gender discrimination claim. Most claims don't succeed for lack of evidence - which does not mean the the bank had no case to answer, merely that the standard of proof is very high. Many other cases never reach court because claimants run out of money. I'm not sure how any intelligent person who have thought about the issue can claim minorities are unfirable! I'm sure like any other employee facing a work place dispute, such as sexual harassment or bullying, a minority is not going to get any real support from management and will probably have to work harder to get taken seriously |
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| Date: |
15 Jun 2008
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| Name/Email: |
Anonimous ()
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| Company: |
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| Read the several comments from people here, all of them focusing on voluntary redundancy (most of the time with definitely quite interesting packages). Yes the choice is still embedding a risk, but please do not tell me that you have not made your deal too in a way. What about the third stage the writers is mentioning "exiting whole business areas, with ethnic cleansing of entire departments, regardless of talent, ability or hard work". That is when still you may not be made redundant, when you well-known, appreciated, profitable and overperformer may not find your place anymore, just because an entire department has been cancelled from the orgchart. They may not want to let you go but they cannot either offer you anything appealing to retain you. And who you have to blame? Yourself? Not really. The company? Maybe. But the dynamics are those in downturns and we all know. Let us think also then to peole who are just hit in their career opprtunities and who then face a choice: staying in a position just not to lose the place,or leave (voluntary, without a package) to avoid to step back and go below that level of professionalism and compromise you would undeniably need to accept. |
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| Date: |
19 Aug 2008
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| Name/Email: |
Cross but Savvy ()
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| Company: |
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| I was made redundant on the day I returned from a year of maternity leave. "Global downturn rubbish." My boss was one of the worst managers I had ever had. I had a really good go at him with HR sitting in the conference room. I got a decent package and being on the "saver lifestyle" after having a child hasn't hurt along with a very understanding and supportive husband who is also in the business. I've picked myself off and dusted myself off and am looking for the right next job for myself. But basically, all investment banks are full of a bunch of insecure, money grubbing men. I will probably go back to one again because of the money and I am stating "flexble working hours please" at the start. It's not looking too good at the moment but let's see what happens. I give the next role a year and a quarter before I get pregnant again. And then let's see what happens after that... |
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