Even C-Level Wall Street Execs Face Challenging Job Market

Early 2008 has been a rough ride for Wall Street. The first part of the year saw some of the worst layoffs in recent history, and executive chairs at some of the industry's top firms have been swiveling faster than ever. In the past year, 22,000 New Yorkers who worked on Wall Street have lost their jobs, according to a Crain's estimate. And the pink slips are expected to keep flying. About 7,000 Bear Stearns employees are newly on the job market following the firm's acquisition earlier this year by JPMorgan. And other Wall Street stalwarts -- including Citigroup, Merrill Lynch, UBS and Morgan Stanley -- also have announced drastic staff reductions. In all, New York City's Independent Budget Office estimates that 33,300 Wall Street employees will be on the street looking for work by next year. The turmoil has reached the C suite. Recent changes at the top include the ouster of former Wachovia CEO Kennedy Thompson, ending a three-decade-long career on Wall Street; Credit Suisse CIO Thomas J. Sanzone jumping to Merrill Lynch to become EVP and chief administrative officer; John Thain replacing Stan O'Neal as CEO of Merrill Lynch; Diane Schuneman's retirement from Merrill Lynch as SVP and head of global infrastructure solutions after 36 years with the company; former Credit Suisse senior compliance officer Steve Matthews' move to Nasdaq OMX as chief legal and compliance officer of its new pan-European market for blue chips; and ex-Goldman Sachs executive Ralph Frankel's jump to Solace Systems, a supplier of high-speed, low-latency content networking systems, as CTO. But is all the movement in the executive ranks simply fallout from the subprime mortgage collapse and subsequent credit crisis? "It's overly simple to ascribe this to the credit crisis," says Shawn Banerji, managing director in the global technology practice at New York-based Russell Reynolds Associates. "Although that is a contributing factor." Mike Everall, previously a senior manager in the security and privacy area of Deloitte & Touche and a victim of recent job cuts, says that while the credit crisis certainly has contributed to job losses on the Street, the activity is due to a number of economic factors -- including skyrocketing oil prices and the increased cost of living, and even the upcoming presidential elections. "There is a lot of pressure on cost, generically," he explains. "That means corporations are looking at the replacement cycle. They're looking to put off purchasing hardware infrastructure, and are delaying the recycle and rebuild process as long as possible." This, in turn, is putting pressure on the major technology companies, such as HP, Cisco and Intel, Everall adds. "Technology is always seen as a cost and less as a benefit," he says. "And that means there's going to be more mobility in the market." With the move to slash spending, Everall continues, organizations are reevaluating even executive roles to determine if positions are directly revenue-related or whether they can be eliminated. "Accountants are king again," he says. "The preoccupation is with returns on the shareholder investment." According to Everall, a former CISO for the investment banking divisions of HSBC and Dresdner Bank, during an economic downturn, technology positions are among the first to go. "It's part and parcel of the economic cycle. With technology and information security, it's relatively easy to make short-term cuts -- from executives to the guys on the ground," he contends. "Organizations can go for a period of time on what they've done before [in terms of IT]," Everall explains. "We're also getting in a cycle where people have to do something for the sake of doing something in terms of letting people go. And it's easier to let someone go and give them a good payoff than to address corporate failures. But the economy has been the primary pivot point." Still, Russell's Banerji says, the economy isn't entirely to blame for the current job conditions on Wall Street. The job market's natural cycle also is spawning plenty of moves, he says. "You also see talented people simply being afforded great opportunities," Banerji contends. He points to former Morgan Stanley IT executive Guy Chairello's move to JPMorgan Chase to be its CIO as an example of a job change that was not driven by the credit crisis. New Jobs, New Challenges In the meantime, Wall Street workers looking for their next job are finding that in the current rough economic times, firms are looking for a different set of skills. According to Banerji, companies today are looking for executives with strong enterprisewide communications skills who are able to work well with people from different departments and bridge traditional silos. "We're seeing less of a focus on people who are deeply technically competent, such as computer scientists, and more of a focus on commercial and business acumen," Banerji relates. "[Firms] are looking at people who have developed influencing skills, as they have to build relationships in various nodes of the company -- such as with the CIO, legal counsel and all the line executives in risk management, compliance and governance who had previously been queens and kings of their own kingdom." The CIO must now drive alignment with business goals, Banerji adds, and talk to business-line leaders, such as the head of fixed income, to see what they are doing to create value for the business. Larry Tabb, founder and CEO of TABB Group, adds that while firms are seeking executives with different skills, corporate belt-tightening means that C-level employees also are likely to be frustrated in their current jobs and more likely to want to move on. "Typically, when there's radical market changes like we're seeing because of the subprime crisis and the industry moving from boom to challenge, you do see different skills being needed to run different positions," he says. "What people look for in a retrenchment cycle is someone who can manage costs better and is OK at saying, 'No. We don't have budget to do this now, and we need to cut our staff by 5 to 10 percent.'" In times of expansion, Tabb explains, companies need someone who is really good at developing and thinking of how to re tructure a business for growth. "But in a challenged environment, the person who is interested in building the business isn't going to be fulfilled cutting back on what they've developed and doing a retrenched strategy," he adds. "Those people will probably go elsewhere."