Morning Coffee: JPMorgan's new deal for its wayward 22-year-old bankers. Citi has ways of making you resign quickly

If you're an incoming analyst to JPMorgan's investment banking business and you've already secured an offer to join a private equity firm, then be gone with you: JPMorgan does not want to know. 

Jamie Dimon already expressed his disapproval of junior bankers who arrive with private equity offers last year. The Financial Times reported last month that both JPMorgan and Goldman Sachs had begun insisting that incoming analysts declare whether they already had private equity offers. Now, JPMorgan has gone one step further: it will fire analysts who accept private equity job offers with future starting dates within 18 months of joining the bank. 

Instagram account Litquidity intimated the change at JPMorgan earlier this week. The FT says the new strict conditions were communicated to the bank's incoming junior analysts in a letter from heads of the investment bank which says, “If you accept a position with another company before joining us or within your first 18 months, you will be provided notice and your employment with the firm will end."

For 22-year-olds due to start at JPMorgan in the next month or so, it's a bit of a shock. Private equity firms have begun recruiting for their own junior positions two or even three years in advance, meaning that if you want to work in private equity after an apprenticeship in banking, you need to secure the offer before you even arrive. Private equity offers are hard to come by; getting one is a great achievement. Now it seems that JPMorgan juniors will need to give theirs up.

In return for this sacrifice, JPMorgan has made a concession of its own. Instead of requiring its analysts to sign up for a three-year program, the FT says it's cut the program to two and a half years. During this time, the analysts will typically earn $170k+ a year. When the two and a half years are over, the juniors at the bank can become associates at JPMorgan or finally leave for private equity. Unfortunately, all the private equity jobs might have been filled with junior bankers from elsewhere by that point. 

Separately, Citi's 20,000 job cuts are still not over.  The "Bora Bora" cuts involving the delayering of Citi management and the removal of 7,000 people ended last year, but the "no-name" cuts involving another 13,000 people are ongoing. 

Citi CFO Mark Mason said in January that he expects to spend $600m on severance pay in 2025. Some of that will be going to the 3,500 people who are now losing their jobs at Citi in China as part of "simplification efforts." 

The FT says the Citi people losing their jobs in China had been providing IT services to other Citi divisions. The bank is incentivising them to go away quickly by offering a month's pay for every year worked and an additional six months' pay if they sign the severance agreement this month.

Meanwhile...

Goldman Sachs president John Waldron says the bank has reined-in risk taking as a result of Trump's trade war and that this will have an impact on the firm's capital markets and trading businesses. (Financial Times) 

Blackrock is cutting another 300 jobs after it already cut 300 jobs earlier this year. (Bloomberg) 

Man Group has performance issues and it wants its quants in the office five days a week instead of three for a period of three months. “The mood is bad.” (Financial Times) 

Citadel CEO Ken Griffin is unhappy at the state of the US. "I never thought in my life I would see the U.S. priced higher in risk cost than a number of countries like Spain, Germany or France. You gotta be kidding me." (Reuters) 

The UK government will not be taxing carried interest as income. The tax rate will only rise to 34.1%, whereas the highest rate of income tax is 45%. (Financial Times) 

Cliff Asness at AQR says he's surrendered to machines and that AQR is now using machine-learning algorithms to identify patterns it can bet upon, even if it's not always clear why. Asness also declared: “What drives me most is revenge upon my enemies." (Financial Times)   

Alphabet is still hiring engineers even as AI advances. “I just view this as making engineers dramatically more productive, getting a lot of the mundane aspects out of what they do.” (Bloomberg) 

Boston Consulting Group fired two partners after they conducted unauthorised work to overhaul the aid distribution process in Gaza. (Financial Times) 

CVC says it's not easy working in European private equity. Investors need to navigate large cultural and economic differences, and find value amid the region’s less efficient markets. “It’s just difficult to come here and to really understand all the nuances..." (Bloomberg) 

Apollo has been hiring from Citi and Bank of America as it works with banks to raise and deploy private capital. (Bloomberg) 

Life in the $500 airport hotel: "All the touches were fab: binoculars and a jet tutorial for plane spotting, a foam roller for getting out all those travel kinks, a bathrobe, Nespresso machine, tea kettle and Balmain toiletries." (WSJ) 

What to do when you graduate without a job. “Don’t get freaked out that other people seem to be able to afford stuff you can’t. They all have secret parental support.” And: “Lentils are extremely cheap, easy to cook, and will make your hair and skin look better than any expensive product.” (The Cut) 

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