It will be many months before it is clear where Wall Street’s downward spiral will stop. Already, more than 120,000 jobs have been cut across the industry, and some analysts bumped their estimates upward by 10 to 20 percent last week after two investment banks, Lehman and Merrill Lynch, lost their independence. One rationale for mergers, like Merrill’s marriage to Bank of America , is to cut expenses and overlapping jobs.
The storyline has already played out at Bear, which was acquired by JPMorgan in March for $10 a share. The bank hired just about half of Bear’s 13,500 workers and kept about 600 in short-term transition teams. JPMorgan also tried to help Bear employees find new jobs through what it called its Talent Network and has now offered to share the network with Merrill and Lehman. “I think people feel generally relieved to be here given the market turmoil we’ve seen,” said Jeff Urwin, a Bear employee who became the head of JPMorgan’s investment bank.
Some from Bear say now that they feel fortunate to have fallen first, before the job market deteriorated further.
“Who’d have thought we were the lucky ones by going down first?” said Vincent Van Pelt, a Bear executive who is now the global head of equity derivatives and commodities for Standard Chartered, a British bank with a large presence in Asia, Africa and the Middle East.
One Lehman employee who works in London said: “A lot of people have put their heart and souls in these companies. They feel betrayed by a number of factors: the market, the management, the regulators.” The employee, who did not want his name used because he did not have permission to speak with the media, added, “A friend of mine who was at the Bear sent me an e-mail saying, ‘I don’t have to imagine what you’re going through.’ ”
The Friday before Lehman filed for bankruptcy, Sept. 12, should have been an unabashedly joyous day for Lance Bylow, a senior vice president in Lehman’s private investment management business. His wife, a part-time event planner, gave birth to their second child. But Mr. Bylow’s job at Lehman remained in question until Monday, when Barclays Capital added it to the units it purchased.
Mr. Van Pelt, the Bear executive, said London was home for him and his family, but he was so shaken by Bear’s collapse that he was receptive to an offer to move to Singapore. He sat down with his wife and three children and they jointly made the decision.
“If you’re some place for a long time, you just kind of get used to it,” he said. “This opened up our vistas.”
One Bear worker who tried to play it safe was Doug Pugliese, an investment banker who said he saw trouble on the horizon beginning in 2006. He and his wife believed the easy credit could not last forever, so he purchased a house in an area in Pennsylvania that was less expensive than the New York suburbs. It meant nights away from his family, but a paid-off house.
Then, in March, even Mr. Pugliese lost out. His Bear stock holdings crumbled, and a hedge he put on to short financial stocks became a wash when JPMorgan acquired Bear. With newborn twins and a toddler on his lap, Mr. Pugliese, 43, quickly pushed aside notions of leaving the industry. He now works at a valuation consulting firm called Marshall & Stevens.
“The thing about investment banking is it’s so grueling that you are always daydreaming about going off and doing something interesting,” Mr. Pugliese said. “Your heart is crying out, but your wallet is telling you there’s nothing else out there that is going to have this kind of payoff.”
