As Heads Roll on Wall Street, Resumes Flow, Headhunters Busy
NEW YORK (AP) _ On Wall Street these days, the name of the tune is resume mucho.
As heads roll during the recession in the securities industry, many executives are searching for new opportunities out of fear their departments will be the next to get the ax.
Headhunting firms report that resume and phone inquiries about locating new jobs have zoomed in recent months. Amid growing paranoia, Wall Street professionals are keeping their ears to the ground for word of openings - often for less money.
″A year ago, people still had this idea it was a God-given right they make $300,000 a year. It’s not the case (anymore),″ said Erica Henner, president of Henner Associates Inc., a Chicago-based executive search firm.
Since the October 1987 stock market crash, the securities industry has lost about 35,000 jobs nationwide. In New York, Wall Street employment is down to 145,000 from a peak of 163,000, according to the U.S. Bureau of Labor Statistics.
Merrill Lynch & Co., the nation’s largest securities firm, is cutting more than 3,000 jobs. No. 2 Shearson Lehman Hutton Inc. slashed 800 positions in December and has extended cuts into its elite investment banking corps.
″People are going on more interviews than they were before,″ said a 26- year-old executive at a major Wall Street firm. ″You just don’t know. The cutbacks keep coming.″
Following the roaring ’80s that turned Wall Street into a river of money, investment firms are damming up expenses, from fancy dinners and travel budgets to unproductive workers and entire departments.
Personnel traditionally accounts for as much as 60 percent of expenses at Wall Street firms, which industry officials said are seeking to trim such costs through layoffs, lower salaries and reduced bonuses.
″For the average guy there’s some degree of panic and a lot of caution,″ said Steven Littman, managing partner at the executive search firm E.J. Rhodes Associates Inc.
″People are concerned about the stability of their future,″ said Littman, whose firm is receiving about five times as many calls and resumes as six months ago. ″Business heads are falling, things are changing and people are concerned about what’s going to happen over the next year or two.″
Some Wall Street firms are taking advantage of the insecure environment to upgrade departments by luring away talented deal-makers, often for less money than in the mid-’80s. Lower 1989 bonuses have made some executives take job offers more seriously, although the most sought-after still command higher compensation when they jump firms.
″At all levels people are more willing to sit down and think about what their options are,″ said Joan Zimmerman, executive vice president at GZ Stephens Inc., another executive search firm.
After reducing bloated sales and trading forces last year, the latest cuts are in investment banking, which thrived on multimillion-dollar fees in the takeover-mad 1980s but has fallen on hard times with dwindling merger activity. Gone too are signing bonuses for business school graduates, guaranteed contracts and hand-over-fist hiring. A former Wall Street bond trader recalled times in 1986 when his firm hired as many as 50 people a week, distributing bulky packets of new staffers’ biographies.
Unlike the money-driven ’80s, many Wall Street pros are concerned about quality of life and company stability. Investment bankers, for instance, are joining second-tier or foreign-owned firms that haven’t had to shrink because they didn’t expand with the reckless abandon of major firms, recruiters said.
″There seems to be less loyalty these days. I think people are concerned about their own welfare and not the firm’s welfare,″ said Gary Goldstein, president of The Whitney Group, an executive search firm.
Brokerages also have scrapped computer development projects, cutting programmers and technicians, while back-office workers who process trading paperwork have been laid off as trading volume declines.
″Since two years ago in October, our business has decreased drastically,″ said Jack Talabisco, president of Botal Associates Inc., a data processing search firm that now places about 10 people a month compared with 40 in 1986-87.
Jim Zamparelli, president of Cross Personnel Agency Inc., said Wall Street firms are hiring more part-time, back-office workers, saving money on salaries and benefits. He said his firm gets 50 to 75 resumes daily.
Despite the layoffs, times aren’t that tough for executives who still have jobs. Recruiters said investment bankers with several years’ experience are pulling in around $200,000 a year, down from $400,000 or more in 1986-87. But drumming up business isn’t easier.
″You know that if you’re lucky enough to stay you’re going to be working harder for less pay,″ said a 28-year-old former vice president whose job was eliminated in a reorganization at a major firm late last year.
He added that after several years of six-figure earnings, ″Learning to live on $50,000 a year is not that difficult.″