Wall Street firms cut recuitment

As the latest turmoil on Wall Street has thrown numerous banks into a tailspin, anxiety is high for seniors who are still set on entering the field of finance after graduation.

After undergoing momentous changes — including the bankruptcy of Lehman Brothers and the sale of Merrill Lynch to Bank of America — the finance industry may be loosening its grip on seniors’ plans.

Ankur Patel ’09, who spent his summer working in treasury and security services at JPMorgan Chase & Co., said he believes many of his peers will consider other post-graduation paths.

“There is definitely a decreased interest in banking because of the lack of job security,” Patel said. “People are starting to look at consulting and law school.”

Career Services director Beverly Hamilton-Chandler, noted that more students in the Class of 2008 selected graduate school as an option than in the Class of 2007.

“In these uncertain times, it would be reasonable to assume that we might see a similar trend when we survey students in May 2009,” Hamilton-Chandler said in an e-mail.

Hamilton-Chandler said that while many firms have canceled their scheduled on-campus recruiting events over the past few weeks, this is common at the beginning of the academic year, since the firms may have a high acceptance rate of full-time offers. She does attribute some of these cancelations to the “current state of the economy.”

Peter Capkovic ’09, who interned as a trader at JPMorgan, expects the volatile finance job market to give way to a “consulting bubble.”

“It seems like there is quite a good chance that [in] the next couple of years … more and more people will try to do consulting,” he said.

Capkovic has signed an offer to work full time for JPMorgan. “It makes me think that I am really lucky, because this year’s job market is definitely the toughest one in decades,” he said.

Despite his commitment, Capkovic admits that his is a risky path to follow. “Wall Street has a lot to offer,” he said, “but job security is definitely not one of the perks.”

In the line of fire

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The turmoil in the banking world was more than headline news this summer for seniors.

Patel’s time with JPMorgan coincided with the banking giant’s merger with Bear Stearns & Co. Inc., which was saved from the brink of bankruptcy last March. Thousands of Bear employees lost their jobs, though many found a place with JPMorgan.

Patel said that he felt “a little bit of resentment among the Bear guys because they got hired in one field and had to work in another,” explaining that many of the Bear interns and full-time hires had to move to different groups to keep their jobs.

“What was sad to see was so many people lose their jobs and savings,” he said, adding that those who joined JPMorgan were “very well-satisfied.”

The shotgun marriage of the two firms was not without consequences for JPMorgan employees, some of whom had considered their jobs secure before being displaced by the incoming Bear employees.

Shelter from the storm

Despite bank failures, many students noted that not all banks are created equal. Opportunities in finance are still there for those who want them, though the two remaining investment banks, Morgan Stanley and Goldman Sachs, have relinquished their status as investment banks and have become bank holdings companies, which are subject to stricter government oversight.

Patel said he believes that firms like Goldman Sachs and JPMorgan will remain “insulated from the whole crisis” due to their profitable balance sheets and emphasis on risk management. Nevertheless, he has noticed changes in his classmates’ plans.

Vivian Wang ’09, who interned last summer in the investment banking department of Credit Suisse, similarly said she believes in her firm’s immunity.

She cites Credit Suisse’s “conservative” business model for its relative protection from the crisis on Wall Street. “The market is very volatile, and, surprisingly, I did not feel too much shock when I was working there this summer,” she said.

“Our hiring has been absolutely on par with what we’ve done last year,” Credit Suisse spokeswoman Karen Laureano-Rikardsen said. She attributes Credit Suisse’s unique insulation from the crisis to the relative stability that comes from its integrated banking industry.

Wang has received an offer from Credit Suisse and plans to return after graduation.

Jacob Bornstein ’09, who spent the summer as an investment associate intern at Bridgewater, said in an e-mail that he approached his position with a realistic perspective of the economy’s vulnerability, adding that he believes the current environment can be advantageous.

“There are so many opportunities all over the place, and I think that when you realize that every problem is an opportunity, you realize how ripe this particular period is for making an impact,” he said. He has received an offer from Bridgewater and plans to return after graduating.

During this time of financial upheaval, Wang still encourages underclassmen to pursue finance if they are passionate about the industry.

“Although you’re not going to make as much money as your schoolmates did who graduated two years ago, you’re going to learn a whole lot more,” she said.

Laureano-Rikardsen said the goal is to “hone in on the message that the industry is very resilient, and it will obviously rebound.”

Emma Dinsmore ’09, who spent the summer working for Real Estate Investment Trust WP Carey in New York, said that she made a “complete shift” in her job search focus when she “realized that banks weren’t doing so well.”

While she acknowledged that there is turmoil in the real estate markets, Dinsmore said real estate might be a more stable market than other areas of finance, noting the increased difficulty of entering traditional areas of finance.

“Four years ago, anyone could have could have gotten a job in finance, but you have to be really qualified and have a strong finance background now,” she said.