Investment Banking Layoffs Become More Complex

In the past, firing an investment banker was as simple as a closed (or not!) door discussion and an escort out the door. With the advent of the Blackberry, things got a little more complicated, but the process was still rather straight forward, confiscating the phone on the way to the waiting taxi cab. But as individuals become more connected and digit data more valuable, firms are experiencing added anxiety about proprietary trading models and client information that may be leaving with dismissed employees.

The problem is becoming bigger according to Reuters, with the number of employees being dismissed by investment banks, sometimes all at once. With 130,000 investment bankers losing their jobs at the majors since 2011, it’s just not one unfortunate banker being shown the door every Tuesday. IT groups are faced with monitoring and controlling a mass exodus of employees.

Firms are now scanning through e-mail records for weeks preceding a termination, watching for employees to sending suspicious e-mails containing sensitive information, most often to their personal accounts for later use. Even transfers to memory sticks are being monitored. One dismissed Goldman Sachs programmer was even criminal charged after he stole a high frequency trading code.

Missing their Gadgets

Investment bankers, and pretty much all members of the corporate world today, are so closely tied to their electronics that the confiscation that comes with termination can have real impacts. Feelings of “worthlessness and bereavement” can be increased due to the disconnection that many former employees feel when their daily electronic connections are severed.

Problem is Increases with Continuing Layoffs

It seems that the ongoing pace of layoffs is only increasing in recent months. UBS announced at the end of October a new round of cuts to their investment banking staff, with 400 bankers looking for new work. Further cuts are expected as investment banking revenues continue to fall. In UBS’s case, the job cuts were spread across North America, Europe and Asia and impacted the fixed income, equity trading and corporate finance desks. The cuts are seen as a way to both reduce cost in the short term, and open up future opportunities for the bank to hire stronger performers.

The situation extends far beyond just UBS, with Royal Bank of Scotland also amongst the investment banks that need to shed staff. RBS has announced that it would cut 3,000 further jobs by the end of the year as it retrenches to core activities, mostly due to government pressures.

Facing a Layoff?

For those feeling the heat of potential future layoffs, it’s important that the appearance of any wrongdoing is limited. This means being careful about e-mails, and not giving the impression to any snooping IT eyes that proprietary data may be leaving in either your e-mail or your briefcase. Whether these are trading models, software or client lists, being cognisant of how your communications appear ahead of a possible termination is critical to protecting your interests. Getting caught up in taking any proprietary data, however insignificant it may seem at the time, could put any potential severance package at risk.

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