Would you prefer to work somewhere that does the decent thing and removes surplus employees only after paying bonuses? Or should banks cut and run?
Dresdner is the latest to lop staff in advance of payday – the Telegraph reports that the German bank is preparing to forcibly remove 200 staff and that it’s already cut 60 of them from its credit team, just “days before they were to receive news of their annual bonus”.
Dresdner is no stranger to slimming down before bonus day – it made around 125 people redundant last December. Nor is it the only bank to favour protecting the bonus pool over rewarding employees for their efforts in the previous 12 months – Bear Stearns announced a round of investment banking redundancies a few weeks ago and Merrill Lynch and Morgan Stanley may yet unveil new cuts when they announce 4Q results soon.
Clauses in employment contracts typically mean bankers let go before bonuses are paid have no legal recourse to force banks to pay up.
The advantage of the situation is that there are fewer staff to share bonuses between, meaning lucky survivors are better off. The downside is that you could work all year and walk away with no more than your salary. And the upshot is that everyone has a financial incentive to see as many colleagues chopped as possible before bonuses are paid.
Would you rather live and die by the sword when it comes to bonuses? Or is now the time for banks to provide a financial cushion in the form of pro-rated payouts to those who are let go?