“For the few months after getting laid off, you’re also able to collect unemployment, so I was actually making more money for the first couple months after being laid off than I would have been at work!” said Jeffrey, the former associate from Albuquerque. He spent much of his severance paying off the debt he’d accumulated in his first months in New York, when he thought his job would be more, well, lucrative. “I built up a lot of debt being young,” he said. “I got hired at the peak of the market [in fall 2006], and I kind of just spent, assuming I was going to get a bonus at a certain level, and then the market crashed and I got a bonus at a tenth of that level. I was doing the whole New York summer shares in the Hamptons, going out …” He’s now planning to move to L.A.
Most deposed young bankers reported receiving two or three months’ severance from their former employers, and some even said they also received a pro-rated version of the yearly bonus they would have received come January (one 23-year old estimated his total haul at $50,000). Often severance is paid as a lump sum, meaning it’s “salary taxed as bonus,” as one banker pointed out. In other words, not enough to fund an early retirement, but certainly adequate for an extended convalescence in Amsterdam, or at least surf camp in Santa Monica. After all, most unattached twentysomethings have only themselves to consider (and mom and dad may still be considering them, too). And besides, it’s still summer!
Some fortunate financiers actually lined up new work immediately, enabling them to draw two salaries for the summer. “A lot of us are fine,” said a former Bear Stearns analyst, 23, who was laid off in June, and who’s still on salary from the company until the end of August, along with walking away with two-thirds of last year’s bonus. His new job, at a rival firm, has more responsibility, less grunt work and a higher paycheck.
Also back at work is a shaggy-haired former basketball player named Dave, 23, who found himself assigned right out of training in summer 2007 to the CMBS (commercial mortgage backed securities) group at Credit Suisse, which was at that time “already the worst place to be,” he said by phone the other day. “Two weeks after I started, they laid off a third of the group, which was 150 people. It was pretty morbid.”
When the third round of layoffs came in April, Dave found himself relieved to be on the list.
“I walked out of there smiling,” he said. “There was a bunch of us. We all went to a bar right around the corner and got really drunk.”
After that? “I went to Vegas for a week and I lost about half my severance,” Dave said. “It was a terrible decision. My dad was working out there and I wasn’t doing anything, so I crashed with him; during the days I helped him out—he’s a jeweler—and then at nights I was going crazy, spending Credit Suisse’s money as fast as I could.”
Then there was a lot of lying on the couch and watching TV,. “It got really depressing and boring after a while,” he admitted. “I tried to convince myself to go to Australia and become, like, a professional surfer or something ridiculous like that,” he said. “But I don’t have the balls for that. I’d love to go to New Zealand and be a farmer, sheep herder, and live off the land. But it’s not going to happen.”
Nick, the polo player, is also back in New York looking for a job. “Maybe it’d be nice to go to a smaller city like Chicago,” he said. “I hope to be employed in the fall.”