JPMorgan CEO Jamie Dimon says he's only going to keep about 40% of the current Bear Stearns staff on the payroll. That decision is going to make an already tough job market on Wall Street even more difficult. Ashley Milne-Tyte reports.
KAI RYSSDAL: We got some good news and some bad news for the staff over at Bear Stearns. The good news is that JPMorgan CEO Jamie Dimon said today he figures Bear will eventually be a billion-dollar company again. Dimon led the Fed-sponsored bailout of Bear Stearns earlier this spring. Now, the bad news. Dimon says he's only going to keep about 40 percent of the current Bear Stearns staff on the payroll. Ashley Milne-Tyte reports today's decision is only going to make an already tough job market on Wall Street even more difficult.
ASHLEY MILNE-TYTE: Wall Street did much of its 2008 hiring on campuses last fall, before the damage from the credit crunch fully emerged. Rik Kopelan runs recruiting firm Capstone Partnership. He says Bear aside, the major banks will stick to their commitments: Back in 2001, Merrill Lynch reneged on job offers. When the firm returned to elite campuses to recruit, many students wouldn't talk to them.
Rik Kopelan: They found that they were not getting the top of the class, which is important to investment banking 'cause they always want to get the best and the brightest. So they found that they were getting sort of the middle of the class and it showed up in the following years. Performance was not as good. And it affected their business.
William Wright-Swadel is a career services director at Harvard. He says juniors heading to summer internships landed those positions just as the banking turmoil was escalating.
William Wright-Swadel: So I think students are already beginning to say, "OK, next year how is this gonna play out. And if I'm still interested in Wall Street, what do I need to do?"
Even seniors who have jobs aren't necessarily relaxed. Joshua Borenstein at NYU accepted an offer from a small investment bank last November. Even so . . .
Joshua Borenstein: Because of the way the market is with what's happened at Bear Stearns, and friends of mine who have lost their jobs with Bear or their internships, and because I'm working at a small company, there is some fear that my job might not be there in August.
He says he's keeping in regular touch with the bank just to make sure everything stays on track.