A rubicon has been crossed. There is a rule of redundancies and it usually goes like this: chop whosoever you like as long as they were not recently hired from a university or MBA school. The latter is a no-no because it’s deemed counterproductive and long-term detrimental: if you eliminate ex-students who’ve only just been hired, they’ll tell all their studenty friends and the quantity and quality of students applying next year will fall.
However, in their rush to cut costs, it seems banks are overriding the old rules. People hired only this summer are allegedly being dumped along with the rest.
“We’ve had quite a few junior people coming to us who’ve lost jobs only a few months after joining,” says Jim Nairn at recruitment firm The Cornell Partnership. “It’s an issue without a doubt.”
“I’ve seen a number of people who joined post MBA and post university in the summer of 2011,” confirms James Heath at recruitment firm Greenwich Partners. “These are people who joined banks from top tier business schools and were axed after two to three months.”
Neither recruiter was willing to comment on the particular banks involved, but several sources claim Nomura has let go some of the graduates it employed this summer in sales and trading. The bank didn’t respond to a question for comment, but is thought to be cutting a few thousand people in London.
Not all banks are slicing graduates. “We would never ever consider adding our graduates to the redundancy pool. They are all out of scope for severance, for the first few months of their employment at least,” says one head of graduate recruitment at a European bank.
So what can you do if you’re a recently hired graduate or MBA, with no fewer than a few months’ experience, and you’re let go? Most large firms have already filled their graduate positions for 2012, but Nairn advises re-applying to boutiques, which he says are still hiring graduates for next year.
If you’re an MBA who went into a bank, only to fall immediately out again, you may need to reconsider your options, says Heath. “Unfortunately, without prior experience the recruitment industry won’t be able to help you,” he says. “I suspect that if you have done an MBA and only lasted 2-3 months in an M&A team at a top investment bank, you may not get a job in M&A again.”