Reduction Redux

On Wednesday our department had its reduction in force exercise (I wrote about the prospect of this in a previous post, in which I participated, though not, thankfully, as a victim.

Having been through several of these in the past, I know the drill. The calls start at 9:00, and by about 9:00:01 absolutely everybody in the firm knows exactly what's going on. By 11:00, it's all over, the managers have a meeting to tell everyone it's done, then we all heave a collective sigh of relief and go back to work, albeit much subdued.

This one was different.

For starters, it went on for a looong time. Our group lost a relatively small number of people compared to some others, but the calls didn't start on our floor until about 1:45. And the meeting meant to provide reassurance that it was all over wasn't terribly reassuring; where the message is normally 'that's it', the message on Wednesday was basically 'that's it - for now'.

But the biggest difference this time was my involvement in the process. The senior managers were all occupied with HR doing the layoffs, so as the only senior-ish guy left on the floor, I had to make sure that the people being let go took their things quietly and left without a fuss. This was most unpleasant for me, though I feel bad about feeling bad, because at least at the end of the day I still had a job. Many of my colleagues didn't.

As they don't publish a list of people let go, it's only through osmosis that I've begun to see the extent of Wednesday's activities - a bounced email here, a summarily cancelled meeting there. In the past week, I've also received a flood of LinkedIn (a social networking site which allows people who worked together to contact each other) requests from former colleagues. It seems that lots of people I know, many of whom I've worked with for years, are no longer gainfully employed. And these aren't people that you'd generally say were part of the fat; we're cutting into the muscle now.

But this is how it is in the financial services industry. The press makes much of the size of the pay packets of people working in this industry, but the reason for this, which has only just sunk in for me, is that careers in this industry are often short. Banks are pretty much just buildings, the real assets are its people. The only way banks can scale up or down is by adding or removing staff. Trouble is, very few of us, myself included, take this reality into consideration in our lifestyle. Our spending tends to be in line with our current earnings, we don't discount for the possibility that the earnings river can easily dry up.

The other difference this time around is that all of the firms in our industry are cutting staff. Normally, when people are let go from one firm, then pop up shortly thereafter at another. Eventually, they come back when things get better, and the cycle continues. We're an incestuous little bunch. This time, though, because everyone's downsizing at the same time, there's not a lot of room at the other firms either. People are saying that you need 12 months of reserves if you get laid off today. Let's see, we've got, um, not nearly that many.

After this week, I feel really fortunate to have a job. I hope it stays that way for a while.