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Morning Coffee: Citi exec who fired 5,000 bankers is gone herself. JPMorgan's new approach to graduate recruitment

It’s always a question worth asking yourself when you take on a project with a defined end date or completion condition – what’s my endgame here?  When I finish the project, what will happen to me? There are all too many sad stories of bankers who worked all hours to achieve a goal, then found out that once the thing was done, they weren’t needed any more.  Conversely, there are plenty of cases where getting a deal across the line created so much tension and bad blood that it was impossible for the executives involved to go on working together.

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Titi Cole, who has just left Citigroup, seems to have planned ahead in exactly this way.  She was in charge of Project Bora Bora, and previously headed the “Legacy Franchises” division, both jobs in which she was responsible for getting rid of a lot of Citi bankers.  Although the job cuts aren’t finished yet, the first round came to a conclusion earlier in the year, and Cole has now resigned to go to an unnamed non-profit job. 

This was apparently always her plan – according to an insider, Cole had been ready to leave before Bora Bora had even been announced.  She also has experience in this area, having come to Citi shortly after completing a big restructuring (with many redundancies) at Wells Fargo.

It’s often the rational thing for executives to do.  However necessary you believe it to be, a large redundancy program leaves a lot of negative emotion hanging around.  People have friends, who bear grudges.  The senior managers who do the most work on cost-cutting tend to be treated like the veterans of an unpopular war; in principle, their service is honoured, but nobody wants to hear their stories and many would rather not be left in the same room.

The effect on the managers themselves shouldn’t be ignored.  Firing people is not pleasant; it takes a psychological toll on both sides of the conference room table.  When you’re faced with a job situation where your immediate memories are bad and stressful and where you’re always bound to be respected rather than liked, it might make sense to decide not to continue trying to build a career in an environment where you never know when you’re going to step on an organisational hand grenade thrown by someone who wants revenge.  It’s very noticeable that having earned the nickname “Mack The Knife” at Credit Suisse, John Mack decided to go back to Morgan Stanley in order to revel in it.

If you end up developing a reputation for cutting costs, it’s worth following the example of Titi Cole; make sure you get paid in money because you won’t get paid in love, and make sure you’ve got a plan.

Elsewhere, the conventional wisdom for years has been that you need a top degree from a world renowned “target” university to get a job at a bulge bracket investment bank.  But JPMorgan is trying to change that, a little bit.  It’s introducing “skills based hiring”, with the aim of widening the talent pool of its applicants and increasing the proportion of its employees who have working class backgrounds.

For the time being, the new program is being extended in the operations divisions (as one might expect, skills based hiring has been the norm in JPM’s tech division for a couple of years now).  So it might be a while before we get front office M&A bankers with regional accents and degrees from universities that don’t have admissions scandals.  

Even in the front office, though, there's a value to banks thinking more broadly about hiring. Julian Salisbury, for example, went from a sports science degree at a non-target school to being the highest paid person at Goldman Sachs, via a middle office job that involved literally matching signatures.  Even if JPMorgan does manage to recruit a lot of smart, hungry young people from unconventional backgrounds to its new technology centre in Glasgow, there’s no guarantee that they’ll stay there for life.

Meanwhile …

Former UBS banker Matthew Stopnik has been promoted to head of global investment banking at RBC, and apparently they have intentions to increase share in “our second home market”, the USA. (WSJ)

Titi Cole isn’t the only big name leaving Citi and getting out of the industry – wealth management executive Naz Vahid becomes the 20th big name to leave since Andy Sieg took over, and she will be “spending her full energy on philanthropic activities” after and indefinite transition period. (Business Insider)

Big moves in the world of people who pronounce “corporate finance” as “cawprit fnarnce”; Jimmy Bastock, formerly co-head of corporate broking with Bertie Whitehead at Goldman Sachs in London, has gone to Morgan Stanley. (Financial News)

The accountancy industry in the USA is taking a leaf out of JPMorgan’s book and looking at “competency-based hiring” rather than university credit hours.  At present, you need the equivalent of five years’ university-level education to qualify for a CPA, but in the face of an acute shortage of accountants, they are considering reducing the requirements. (FT)

“It’s not the money, it’s the talent”.  According to local recruitment firms in Abu Dhabi and Dubai, many hedge funds are opening Gulf offices not because of the possibility of raising more money, but because their PMs and traders have asked if they can move there.  Why does the talent want to go there?  Apparently, mainly for the tax advantages.  So it is the money after all. (Business Insider)

Bank of America has been promoting in its European ECM team – Phil Drake will be head of UK, Lucrezia Lazzari head of Benelux and Rahul Bhandari will be head of equity-linked ECM as well as his current private markets role. (Financial News)

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AUTHORDaniel Davies Insider Comment
  • Om
    OmoWallStreet
    24 June 2024

    This picture is not Titi Cole. Not sure where this photo was sourced from. She looks nothing like this.

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