When it comes to employment on Wall Street, it is the best of times, it is the worst of times. Or something along those lines.
Recruiters are reporting the outlook for job hunters is mixed. Large Wall Street brokerages and merchant banks are in a financial slump that is forcing them into cutbacks and layoffs. But asset management operations have sustained less damage.
Nearly all major financial firms have made some layoffs since last fall. The recruiting firm of G.Z. Stephens, New York, is projecting layoffs will total 10% to 12% of staff across the board by the end of the year.
Salomon Brothers Inc., announced plans to lay off nearly 5% of its work force worldwide days after posting a loss of $902 million for 1994, its worst year ever. Goldman Sachs & Co. announced plans to drop 1,000 employees in addition to 500 already laid off last fall. Merrill Lynch & Co. dropped 500. CS First Boston plans to cut nearly 15% of its work force. Bankers Trust plans to lay off approximately 10% of its work force.
But the money management side is faring better.
"In part that's due to the money management business having a strong secular growth trend and organizations having confidence that, regardless of the short-term ups and downs, they'll continue to need increasing numbers of solid professionals over time," said Richard S. Lannamann, managing director in charge of investment management at Russell Reynolds Associates, a New York executive recruiting firm.
Money management has been a relatively stable business compared to the securities industry, banking and insurance in the last few years, he said.
However, asset management has not been spared completely. Industry sources expect the firms making wholesale cuts - such as Bankers Trust, Goldman Sachs and J.P. Morgan - will cut into asset management as well.
Given the widespread losses on the sell side, cutbacks in some firms have extended to all departments in what is essentially a "head count cutback," said Joan Zimmerman, executive vice president of G.Z. Stephens.
"Any department, whether they were profitable or not, was forced to reduce their head count by X percentage."
Even in cases where firms are not cutting back, they're being cautious about adding staff, said recruiters.
Mutual funds have slowed down their expansion process as a result of their 1994 performance, and consolidation in the market also will take its toll on hiring in that segment, said Michael Martinolich managing director of executive recruiters Smith Hanley Associates, New York.
Investment management firms are doing well, but the growth in assets does not mean they are adding to their staffs proportionately, choosing instead to realize economies of scale, said Nicholas Crispi, president of Crispi, Wagner & Co., a New York-based executive search firm.
Additionally, the current uncertainty is cutting into the ritual post-bonus job-hopping that was seen in previous years, said Franklin K. Brown, executive vice president and managing director at Handy HRM Corp., executive recruiters in New York. The job market is unstable, so people tend to stay put unless their hand is forced by an opportunity or circumstances, he said.
"I don't see people jumping around unless it's very compelling or they have no choice," said Mr. Brown.
There is still demand for investment professionals, but it is not wholesale or across the board, say the recruiters. Firms are still looking for people for leadership positions, as well as some in the international investment area and client services, according to the headhunters. For example, recent hires include Win J. Neuger, who resigned as managing director of Bankers Trust to become CIO at AIG Global Investors Inc., New York.
"It's a year in which the demand is for new leadership, the top jobs," said Mr. Brown. "This year the theme is the quest for new leadership. There's no particular segment that's warmer than others across the board. There are these searches for leaders to run things," positions such as chief investment officer, chief executive or chief of trading, he said.
"Where there's always demand is for the broad-gauge, very smart, seasoned investment professional who thinks globally, understands strategic and tactical asset allocation, is up to date on investment technology, has good client skills and is a solid general manager - the all-around star," said Mr. Lannamann.
In short, he added, firms are looking for "the broad-based generalist who can be CEO or CIO."
Some firms are looking to change course after 1994's disappointments, and they are seeking to replace their leadership as well, said Mr. Lannamann.
"1994 was a tough year for chief investment officers to shine. There are a number of firms that feel that the investment results of their organizations have been disappointing or the mentoring and management and monitoring of some areas - such as fixed income and emerging markets - was not as strong as it could have been," said Mr. Lannamann.
Hedge funds also continue to be hot, despite the hit many of them took last year, said Mr. Martinolich. A number of firms still managed to perform well last year, and they are hiring. One notable recent relocation was Robert Citrone, head of emerging markets at Fidelity Investments, New York, who resigned as manager of three of Fidelity's funds to join Tiger Management, a New York hedge fund firm.
Despite having had a bad year in 1994, hedge funds are as opportunistic about their hiring as they are about their investments, so many of them are still hiring personnel, said Ms. Zimmerman.
"If they believe someone has potential talent for their business and they fit in terms of the way they view managing money and a track record, then they will bring them in," she said.
There is still selective recruiting for experienced portfolio managers and analysts in the international and emerging markets area, said Ms. Zimmerman, but it is mainly in Asian markets; there is not much interest in hiring Latin American specialists.
Another area doing well is the building of investment research departments by major banks, particularly international banks taking advantage of the weak dollar to invest in U.S. markets, said Mr. Crispi. That is the one area where employers are looking for junior-level staff, he said, and noted Crispi Wagner has five or six clients currently searching for that kind of personnel.
Yet another area where there is some selective hiring going on is the client service, where some large institutional players are concentrating on developing client retention efforts separate from their marketing departments, said Mr. Martinolich.
He noted Oppenheimer Capital has been very successful in adding "a number of good folks in the last year who are dedicated to client service."
Another large player, Neuberger and Berman, recently hired three institutional marketing and client service professionals as part of a reorganization of those functions into regions.
Overall, the employment picture is not as bleak as the sheer numbers would show, according to recruiters. Even most of the people let go from investment houses are finding homes elsewhere, they say.
"By and large if they're good and they're profitable, someone else will probably recruit them," said Ms. Zimmerman.