Lisa Chow is the economics reporter at WNYC. She tries to explore in her stories surprising aspects of New York’s many economies—in plain view or hidden, in neighborhoods or sectors.
Little Hiring and Lots of Firing in City's Financial Sector
Friday, November 07, 2008
New York, NY —
All the bank failures, bank conversions, and bank mergers mean New York’s once thriving financial sector is shedding jobs - fast. Ten thousand this past year, and an estimated 30,000 more in the coming year. Recruiters say there’s a lot of talent on the street, but few hires are taking place. WNYC’s Lisa Chow reports.
REPORTER: Wall Street, the way we knew it, does not exist anymore. Just ask Stephen Chen. It was Saturday, March 15th, the day before Bear Stearns fell. Chen was working around the clock. He left his office for a lunch break.
CHEN: That day I walked out, and here was a home I had found for two years, and I knew it wasn’t going to be the same in 24 hours, and it was actually the same day that one of the cranes fell in New York.
REPORTER: Eight blocks from the investment bank’s headquarters, a large crane collapsed, killing 7people.
CHEN: I was kind of in this daze because we had been up like all night long and I hear sirens in the background and I see this huge structure leaning against the side of the building and the façade of the building was crushed in and I go back to my company and it was such a strange mirror to what was happening at my firm.
REPORTER: Talking at a cafe recently, Chen says, just after the sale of Bear Stearns to its rival, JP Morgan Chase, the conversation inside the office was, don't talk to anyone outside the office. In the weeks that followed, people started losing their jobs. Chen survived, until last month. Financial headhunter Kurt Kraeger says with more people competing for fewer jobs on Wall Street, the outlook for financial analysts like Chen is grim.
KRAEGER: Someone like Stephen who would have come out of Bear Stearns, and we would have told him all about UBS, or Goldman Sachs or Lehman Brothers. Now we have to tell him about insurance companies. What about going to Chicago? Or what about going to a not for profit?
REPORTER: Chen is staying in New York, at least for now. The 25-year-old grew up in the Bronx. He went off to Brown University, and then returned to New York, first working at a startup company. He said he was drawn to finance because it was considered sexy at the time. These days ... he finds himself defending his old job.
CHEN: I was actually sitting at a dinner table this past weekend with a bunch of cousins. And there was definitely this sort of unease of like, you know, you work on Wall Street, you must therefore be greedy and be a bad person. You only get paid when you bring value to people. And I think that investment banks and Wall Street brings tremendous value and they get compensated for it.
REPORTER: Chen says that it's easy to point fingers. And, he says, we have pointed fingers at Lehman Brother's former CEO, brokers, people who bought homes they couldn't afford, and former Fed Chairman Alan Greenspan.
CHEN: Everyone has a small part of blame in this. You know it’s really easy to say, you did it. It wasn’t me, but that’s not really fair.
REPORTER: For someone who lost his job a few weeks ago, Chen seems surprisingly upbeat and takes me to his new venture.
CHEN: Hey Al, how’s it going?
REPORTER: Chen is on a cell phone, standing on 43rd Street in Hell’s Kitchen.
CHEN: We are outside, I think, your apartment.
REPORTER: He introduces me to his new business partner.
ONG: Hi, my name is Alastair.
REPORTER: Hi I’m Lisa.
ONG: Nice to meet you Lisa
CHEN: This is my friend, my business partner, and my mentor.
REPORTER: Alastair Ong is a former lawyer who’s building his third company. His first one was in e-commerce, his second was remittances to the Philippines. This one: selling environmentally friendly sandals, made from used tires in Asia, to people here in the US. And this isn't Chen's first startup. He built his own discount travel business in college, making about 10 thousand dollars. Chen and Ong go over some of their expectations.
CHEN: Would this be full time right off the bat, or would it be part time as we ramp up sales?
ONG: Right now as I start a venture, I'd like to focus my immediate attention to it and almost all my efforts into it, so right now i'm going to look at this like a full time job.
REPORTER: Chen says with severance and savings, he has enough money to get by for six to eight months. He says his parents aren't thrilled about his losing his Wall Street job, and so far, Chen's been vague with them on the details.
CHEN: I haven’t told them that we’re going to sell sandals, I’m not sure that that’s the ideal thing they see their son go into.
REPORTER: But Chen isn't doubting his decision.
CHEN: I feel really good about this and I think this is a right chapter.
REPORTER: So for the thousands of people who lost their jobs and want to get back into the financial industry, here's one person they won’t be competing against. For WNYC, I'm Lisa Chow.