Discover your dream Career
For Recruiters

I was an MD in an investment bank. I laid off most of my friends

When things are going well, banking can be a great industry to work in. If you're in a terrific firm with a terrific brand, there's a lot of energy and camaradarie. There's also money, and prestige. You feel important. 

But when things aren't going well banking can be very tough indeed.

I used to manage at 100 person team. In the course of three years, between 2015 and 2018, I shrunk my team to 40 people. It was a process of gradual attrition, of continuous slow cuts in pursuit of higher returns on regulatory capital.

It's never easy making these kinds of cuts. The people you're letting go are the folks you groomed and mentored. They're often good people; you're not cutting them because they're bad. You're cutting them because the environment has changed and the economic return just isn't there.  

Some of the colleagues I let go have never worked on Wall Street again. And some of them still have not forgiven me. People understand that it's business first, of course, but they are also human. 

This is why when you become senior in banking, and in any industry, you need an ability to remove yourself from a situation emotionally. It's not easy to lay-off folks you've sat next to for ten hours a day for ten years. You need to hardwire yourself to make tough decisions while retaining your humanity. I've seen sadists who take this to an extreme and enjoy the power that laying-off colleagues brings. I was never like that. 

When I laid off my team I tried to be as upfront and transparent as I could. This might be why I'm still on talking terms with 80% of the people I let go today. It can be harder to find a new role when you're senior, and I tried to ease the transition as much as possible by giving more experienced colleagues a heads-up on what was coming. That way they could prepare and go the buy-side or elsewhere. 

If you're letting people go, you also need to remind yourself that there's nothing inherently wrong with your actions. Bloodletting, particularly at the top, can be necessary and healthy. One of the reasons Goldman Sachs has done so well historically is that it has a tradition of only allowing people to remain as partners for three or four years. By comparison, senior staff at most banks are hoarding seats. - They haven't made as much money as their predecessors and they want to stay on, meaning that juniors and mid-ranking staff can't move up. Regular layoffs at a senior level are a necessary part of the ecoystem. Remember that.

Colm Cooper is a pseudonym

Photo by Andrea Riondino on Unsplash

Have a confidential story, tip, or comment you’d like to share? Contact: in the first instance. Whatsapp/Signal/Telegram also available.

Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)

AUTHORColm Cooper Insider Comment
  • Bi
    7 October 2021

    Bottom line: never hire or work with family or friends! Doing so irreparably ruins families and friendships. And saying 'its not personal it's business's a cop out and, BS!

  • pb
    6 October 2021

    Must be nice being in the glamour side of IB. Then, there's all the people who have the non-glamour jobs, people who have to work their butts off, get paid a fraction of what the glamour guys get, and then see their jobs exported to Mumbai or other places far from US banking centers. But as is clear here, IB is all about squeezing everything out of those below you to maximize your own pay and bonuses.

  • DS
    1 October 2021

    Juniorize and electronify, continue to transact with relationships that I nutured for the firm, but fire me when I am having my best year yet. Its not personal....

  • Ki
    1 October 2021

    I can't stand when people say "It's not personal, it's business." When you are dealing with people it's always personal. And yes, there is something wrong with letting people go. After all,YOU yourself did impact someone's livelihood and ability to feed themselves and their family. Accept that responsibility and yes, live with it, but you don't get a congratulatory pat on the back for not being a "sadist." At the end of the day, you're just someone making someone else's life substantially worse.

  • gh
    30 September 2021

    Firing old employees who are "hoarding seats" is fine? #OldLivesMatter

Sign up to Morning Coffee!

Coffee mug

The essential daily roundup of news and analysis read by everyone from senior bankers and traders to new recruits.

Boost your career

Find thousands of job opportunities by signing up to eFinancialCareers today.
Recommended Articles
Recommended Jobs
Elevate Partners
Investment Associate - Energy Transition
Elevate Partners
London, United Kingdom

Sign up to Morning Coffee!

Coffee mug

The essential daily roundup of news and analysis read by everyone from senior bankers and traders to new recruits.