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Morning Coffee: Lost your job at Morgan Stanley? Try … Santander. Meta shows that bank layoffs are nowhere near as bad as it gets

If the fates have decided that you are to be fired in the investment banking industry, it is much better for it to happen in the early stages of a bear market, while other firms are still hiring.  The people who are laid off in the middle of the downturn end up spending a much longer time out of the market, which is not only intrinsically financially inconvenient, but leaves a gap in the resume that can be a drag on your career for years to come.  So although the Morgan Stanley bankers who got cut yesterday might not be in the mood to hear this right now, they’re actually pretty fortunate to have been let go at what looks like just the right time to take advantage of some pretty unusual industry conditions.

The collapse of Credit Suisse (and Silicon Valley Bank) appear to have had a similar effect to throwing a bucket of krill into a shark tank; the opportunity to pick up franchise players seems to have triggered a kind of feeding frenzy.  For banks like Santander, which has been quietly but effectively building a profitable medium-size M&A franchise, there seems to be a realization that by spending a bit of money right now, they can accelerate their plans to grow to a somewhat larger scale by several years.  And although the teams shaken loose by the collapse of their parent bank are the most obvious targets, they’re clearly not the only ones.  José Linares, Santander’s co-head of corporate and investment banking, has already said that he sees redundancies on Wall Street as “a great opportunity”, and has hired Christiana Riley, previously a rising star at Deutsche Bank.

Santander isn’t the only European megabank that’s staffing up, either; BNP Paribas has hired Evan Riley from UBS to build up its US ECM business, while Unicredit is also hiring in advisory.  It’s all quite a change from a year ago, when people thought that Deutsche was giving up (definitely no longer true) and that the only thing to talk about was the battle between Barclays and BNP to be the last home team bank standing in the EMEA time zone.

This has implications for former Morgan Stanley employees who want to act quickly.  When banks are trying to build quickly, they like to hire teams to complete a franchise area.  So it might make sense to keep in touch with anyone in the same area who was laid off at the same time as you – and with your former colleagues.  And it certainly won’t pay to be snobby about working for a name outside the New York top five.  For one thing, it’s often actually a good sign to have something on your resume that indicates an ability to build something, rather than always fitting into an existing franchise.  And for another, the old maritime advice is pretty relevant – when you’re suddenly caught in a storm, the best policy is to plot a course for the nearest accessible port, not the one with the most exclusive nightclubs.

Elsewhere, thousands of Meta employees discovered yesterday that there are worse things that can be said in a 5am email than “pls fix”.  They were “notified individually” (ie, by email), and then had to go to a big town hall meeting for an address by Mark Zuckerberg explaining which teams had been cut and why.  This is apparently the culmination of a months-long period of uncertainty, which has damaged morale and is quite likely to have created grudges that will last for a long time.

This sort of practice now seems commonplace in the tech industry, while banks still prefer to give their redundant employees the courtesy and dignity of a face-to-face meeting, however short.  The problem is structural.  Young, high-growth companies with a corporate culture that projects optimism and positivity don’t always develop a set of practices and a way of behaving when the news to convey isn’t so positive or optimistic.  Because banking is such an old and cyclical business, managers get a lot more practice in dealing with hard times, so they’re more likely to act well.

Meanwhile …

Santander isn’t the only Madrid-based investment bank that’s aggressively hiring – mid-market specialist Alantra has recruited Michael Maag from Morgan Stanley and Martin Gramperl from Rothschild to build up its Swiss operations. (Financial News)

One of the lawyers for Credit Suisse bondholders who are suing the Swiss government is an expert pizza chef who also acts as ambassador for some small Caribbean nations and has a news website on which he occasionally publishes important documents.  The phrase “colourful character” somehow seems inadequate to the task. (FT)

An unanticipated problem associated with returning to the office this year – a mild winter has meant that there’s much more pollen in the air, so people with allergies are sneezing and coughing all the time, causing their co-workers to be scared they’re going to catch COVID. (WSJ)

Further setbacks in Jes Staley’s quest to clear his name – the judge has ruled that he will have to face JP Morgan’s lawsuit in the Virgin Islands case. (FT)

Strange tales from SPAC world, as a group of people “purporting to be shareholders” in the SPAC showed up at the target company and were so “abusive and threatening” to the management that they called off the deal. (Bloomberg)

The “moral case” for shortening the working week – it would allow people to be more generous with their time, do things for others and just generally be better people. (The Atlantic)

When someone is always online, they generate a huge amount of evidence.  Out of 6 million total pages of evidence in the Sam Bankman-Fried trial, 2.5 million came from Sam’s personal laptops, phones and Google accounts.  It apparently took over a week just to download all his Slack messages.  Someone – possibly multiple people – is going to have to read all of this, while being paid by the hour. (Business Insider)

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Photo by Milo Bauman on Unsplash

AUTHORDaniel Davies Insider Comment

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