A November 16 CNBC.com article has an ominous title: “Banks Seen Shrinking for Good as Layoffs Near 160,000.” But embedded in its dismal paragraphs is a slightly happier number: 83,500. Since 2009, the world’s top 29 banks have cut 167,200 jobs—but they have also created 83,500. Many articles forget to mention this side of the story: It is not a straight loss situation. And new hires are much more likely to claim one of those 83,500 seats than those already at a middle-to-high pay grade.
It is indeed heartbreaking to read a quote like the following from a London banking executive: “When I let go tons of people in cash equities this year, I knew most would be finished in this business. It is pretty dead. Some will just have to find something completely different to do” (CNBC’s source wished to stay anonymous). No one likes to go into a business thinking (s)he is replacing someone with a wife, kids, and bills of his/her own to pay—but most of these cases are not ones of direct replacement anyway. Redundancies are being eliminated, and companies are expanding more agile sectors where the economic outlook is less dire.
Some might ask: But won’t the same thing happen to me in 5, 10 years, if this “shrinking” is “for good”? As uncertainty seems to be the new norm, no one can unequivocally answer “yes” or “no.” But those who get their Wall Street initiation in the midst of this constantly collapsing environment will—or at least should be—only the best of the best. They will have had their skill tested from the beginning, and they will be expected to make good on that skill faster than ever before. They will be nimbler than their predecessors and ever-conscious of the need to be ahead of the game, not just on top of it.
No, the economy (at least in the banking sector) is not yet looking up and may never be at the same level of glory again. CNBC’s calculation that fires still “outpace new hires by roughly 2-to-1” is nothing to make light of. However, finance has never been anything but Darwin’s “survival of the fittest.” It’s time to adapt—and those just entering the arena will be the best trained to do so.
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