Morning Coffee: Investment banks vindicated in not offering crazy perks. Formerly highly desirable employees asked to delay start-dates
Now that Meta is making what the Wall Street Journal describes as, 'the first broad head-count reductions to occur in the company’s 18-year history,' starting tomorrow, the pressure is off investment banks.
Not only will Meta be unlikely to hire much in future as it cuts 10% of costs and leans-in to staff reductions to do so, but it won't be in a position to offer the sorts of perks that have long made it seem like investment banks treat their staff parsimoniously. The perk will now be having a job.
It's the death of the Meta perks that people seem to be lamenting most of all on Blind, the forum website popular with technology employees in Silicon Valley and beyond. "Meta always led the market with above-average compensation and insane employee perks and benefits they offered," wrote one Amazon employee on Blind yesterday. "The next players: Google, Amazon, Apple, Microsoft — simply maintain the status quo and only 1/4 companies provide free food to its workers."
As a reminder, until March this year, Meta's perks included a free shuttle bus to the office, a free laundry service, free dry cleaning and valet, and free food - including dinners at 6pm which enabled employees to take leftovers to eat at home. This generosity was in addition to high pay: a full stack software engineer with two years' experience at Facebook in San Franciso says he/she is earning $205k on levels.fyi.
Banks, by comparison, have increased pay for their technologists but have never matched the Facebook style non-monetaries. You might get to wear a hoodie as an engineer at Goldman Sachs in New York City or to play the guitar and write on the furniture at JPMorgan's Manhattan West building, but you won't get to live rent-free while you're in the office.
Given that banks have held out this long in their refusal to emulate Silicon Valley, it was always unlikely that they would succumb, but the wave of technology firm layoffs now makes a perk-rollout unthinkable. Layoffs.fyi says there have been 100,000 job cuts in technology firms already this year. Some of those individuals will now be looking for jobs in banks instead, where they get salaries, and bonuses if they're lucky - and pay for their own meals.
In the meantime, people on Blind are lamenting that tech-perk-culture is over for the foreseeable. "Until we see ludicrous VC money enter the tech arena again (unlikely for the next few years), we can say goodbye to crazy TC and employee benefits," says the Amazon employee. "All companies are trying to cut costs on their balance sheets."
Separately, times have changed in the legal industry too. Not long ago, it was difficult to find junior lawyers to work on booming M&A deals. Now that M&A deals are no longer booming, junior lawyers are everywhere.
The Financial Times reports that Gunderson Dettmer, a Silicon Valley law firm known for its work in helping technology companies go public, has asked its new associates to start in mid-January instead of October. Across the industry, hundreds of job vacancies have been withdrawn. The Thomson Reuters Institute says profitability in the legal industry is at its lowest level since 2006 and that the implication is that big headcount reductions akin to those of 2008-2009 are needed. Hundreds of jobs are already being withdrawn, but it wasn't long ago that law firms were in a frenzy, hiring staff and hiking pay.
UK banks are complaining that Goldman Sachs and JPMorgan Chase have been using customer deposits to fund risky trading operations. The two US banks have been prevented from growing their UK retail operations too large by ringfencing rules saying that once they get more than £25bn in retail deposits, they must be separated from their investment banking arms. (Financial Times)
Tiger Global lost 5.4% last month and has declined 54.6% this year. (Bloomberg)
It's a hard to be HSBC when your largest shareholder has lost confidence in your business model. “The global finance model that once dominated and shaped the global financial industry in the last century is no longer competitive." (Financial Times)
UBS and Julius Baer have tried moving clients into the metaverse, but motion sickness has been an issue. (Financial Times)
What to say when someone asks about your weaknesses in an interview. "Talk about particular challenges you’ve faced in work environments and how you solved them and communicate what you see as challenges...“I’m looking for someone who feels confident talking about what they’re good at and what they’re not good at. It’s always a red flag when someone says, ‘I’m great at everything,’ because that’s just not possible.” (The Cut)
The bed is the best place to work. (WSJ)
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