In the next couple of months, the largest Wall Street investment banks, including Goldman Sachs, Morgan Stanley, Barclays, and Credit Suisse, will likely lay off several hundred bankers and traders apiece. It will be the largest round of layoffs on the Street since the end of 2008, when banks cut employees by the thousands in the aftermath of the financial crisis.
Although this new rounds of layoffs will not be as significant in quantity as it was a few years ago, it will be equally as significant in its qualitative effect: causing young financially-minded students and professionals to second guess, if not ditch altogether, their dreams of working on Wall Street.
Right after the financial crisis, banks not only cut their ranks but also severely reduced their on-campus hiring practices, lessening the number of undergrads and MBA students they hire each year. This left many students shut out of jobs on Wall Street, jobs they were banking on getting years earlier when they started to study for the GMAT and scribing essays about their future plans.
The good news for some students was firms outside of investment banking picked up the slack, increasing their hiring of MBAs (MBAs who, pre-crisis, would've been nabbed by Goldman, Morgan Stanley, Merrill Lynch, Lehman Brothers, and others). Most notably, Amazon, Apple, and IBM stepped into the banks' place.
For example, from 2008 to 2010, Amazon hired more MBA grads from the University of Michigan's Ross School of Business than Citigroup. Over the same three-year period, Apple outdid Citigroup as well, hiring more MBAs than Citi from MIT's Sloan School. And in 2010, IBM hired more Wharton MBA grads than all of these firms: Citi, BofA, Credit Suisse, and Deutsche Bank.
Of course, it's possible, and likely, that these tech firms were many MBA grads' third or even fourth choice as places to work. However, I'd argue that now they've risen the ranks of MBAs' and others' lists of most desirable employers.
And, I'd also bet that, with each passing day, with each poor Wall Street bank earnings report, with each highly-publicized iPad release, with each groundbreaking piece of Amazon technology, with each Wall Street settlement with the SEC, with each billion-dollar tech IPO, with each call from the Hill to further kill Wall Street bonuses, and with each round of Wall Street layoff like the one about to drop, it won't be long until working on Wall Street will take a way-backseat to working in finance for the Amazons and Apples and other booming high-tech firms on the block.
Tell me this: who's going to be willing to place their career chips on an industry with as little reputability and job security as investment banking?
(DealBook:Wall Street Braces for New Layoffs as Profits Wane)
(Bloomberg BusinessWeek: MBA Jobs: Post-Crisis, a Brave New World)
(Related: 6 Reasons to Choose Boutique Over Bulge-Bracket Bank)
Want to be found by top employers? Upload Your Resume
Join Gold to Unlock Company Reviews