It’s been a while since part 3 of my series of posts on Our London Adventure, but I thought I had better get back to it again or I’ll never finish it off!
In the last post, I gave an overview of some of our travels throughout Europe, with much of this taking place between the time when we got our jobs, and when the Global Financial Crisis hit its peak. Travel was certainly a good escape from what was happening back in the city, but that doesn’t mean that we totally escaped the effects of the crisis that was affecting the world at that time…
The Global Financial Crisis
We had both been in our jobs for about six months before we took off on a month-long trip throughout central Europe, but in the lead-up to that trip things were starting to fall apart in the financial world. At my investment bank (which shall remain nameless, but let’s just say that it’s one of the big ones that people complain about when they are thinking of Wall Street investment banks), we had an intranet that published newspaper articles that had to do with our bank and all of the other big banks. These articles included plenty of facts and their fair share of rumours, but by reading them each day they gave a good insight into just how perilous the position of many banks really was. While banks went through rounds of layoffs of varying degrees, we experienced no such layoffs up until that point, so we were largely insulated from the problem.
Unfortunately I couldn’t say the same for some others, and I specifically recall the day that Lehmann Brothers collapsed. It was of course appearing in articles all over our intranet, and while our office was in the City, we heard about the effect of the Lehmann Brothers collapse down on Canary Wharf, where the closure of their office effectively flooded the employment market with 6,000 additional well-qualified staff on the same day, something that would prove disastrous for anyone trying to get a new job in our industry over the coming months (and even years for some).
My wife’s experience with layoffs
The trouble wasn’t limited to just the larger firms, with my wife’s employer running into significant difficulties when their sales people couldn’t manage to sell the investments that their firm made a living from. As I understand it, their firm would market various investments in managed/mutual funds that were much more boutique than the Vanguards of the world, but as people became more nervous, the ability of sales staff to sell these products was severely curbed.
People say that there is a pub on every corner in Britain, and while this isn’t quite true, my wife’s firm was actually a couple of doors up from a charming little pub. I tell you this because the sales staff at my wife’s firm would go down to the pub at lunchtime each day and have a couple of pints of ale. Their rationale was that a couple of drinks would loosen them up and allow them to do some of their best sales work over the telephone, and my wife would say that this was quite true – they really did do a better job with a couple of drinks under their belts!
Despite the assistance of this ale, their sales started to dry up, and after the collapse of Lehmann Brothers my wife’s firm laid off a lot of staff. Unfortunately my wife was one of them, and so she had her final day on the day before we were to fly out on our extended trip through Europe. Because her firm was fairly small they had a great culture, and were sure to give her a great send off on that Friday afternoon. They started drinking at lunchtime and she didn’t stumble home until about 9pm that night. We had to get up at 3am to make our way to our flight to Berlin, and so it really was a forced march to the airport for her. I’m pretty sure she was still intoxicated at that point so maybe that made the journey a bit easier for a while!
So we set off on our merry way for our trip, which was brilliant, but we had this dread in the backs of our minds about what my wife was going to do for work when we got back. We were sure that she could get some sort of work, but whether it would be decent work was the question. She didn’t want to be pulling beers at a pub like she did back when she was at university, not just because it’s no fun but it would have been lucky to pay a third of what she was earning at her previous job.
Fortunately for us, half of her old firm was sold off and resurrected in a different form, and they contacted her as soon as she got home to offer her a job. She commenced working with them just about straight away, so it was almost like she was never laid off in the first place! Others were not so lucky though, with plenty of the laid off staff searching for some time before finding work again.
My brush with layoffs
As I said earlier, our firm was unscathed before the Lehmann collapse, and I returned to my to my job after our Europe trip with no issues. Even so, the rumour mill was going into overdrive, and in late October/early November of 2008, we knew that layoffs were coming. The rumour mill (obviously fed by leaks from those in the know) told us that 10% of staff would go on a Tuesday, and our team had 12 people in it. That could mean one or two people, and it was said that the last person in would be the first person out. I was actually the second-last person in, so I may well have been out of the firing line, but if they chose to lay off two then I was pretty sure I was screwed.
I was pretty nervous when the day arrived but got down to work as if it was any other day. I chatted about it with the guy who sat next to me in my cubicle, and at about 10am the two co-managers of our team called us into their shared office. I didn’t realise it initially, but one of our team (an Aussie girl who was the last person hired) wasn’t actually in the office, and our managers soon told us that she had been called down to HR to be advised that she was being laid off. I felt for her because she was a fellow Australian, but wasn’t surprised since she was the last person hired. I must admit that I felt quite a bit of relief to realise that I wasn’t actually being laid off as well – I had dodged a bullet this time, but there was no guarantee that more shots wouldn’t be fired in the future.
The meeting with our team managers only lasted about five minutes, in which time they told us that the departing employee would be brought back up to her desk in about 10 minutes accompanied by a security guard. She would have about five minutes to collect her things and say goodbye before she would be escorted out of the building. I can understand why they did it, but it really did make the whole experience seem so inhumane and I could see the tears in her eyes as she said her goodbyes to us. It really was a terrible feeling to be able to do nothing more than watch.
After she was escorted out of the building, I took the opportunity to head to the front of our floor to look out the windows that overlooked the entrance of our office. I was greeted by the sight of a significant number of people milling around the front of the building in confusion. It really was like they were thinking “what the hell just happened?”, and I later learned that one Vice President, who assumed he was being called down to HR to be notified of which of his team would be laid off, was actually told that he was the one being laid off! It really was a bad day for people at all levels!
I actually kept in touch with her after that via email, and it took her another eight months to get another job. I think she was quite depressed about the whole thing, but fortunately her husband, who worked in IT for another big bank, managed to keep his job, so they were fine as far as finances were concerned. They eventually moved back to Australia and they had a little baby boy, but it has been a couple of years since I have heard from her.
The threat of layoffs remained for me
Even though our bank was one of the least-affected by layoffs, that one experience made me very cautious about letting people know my future plans. While we were planning to go home at the end of February 2009, I wasn’t game enough to give them any more notice than I had to, even though I felt terrible doing it. This was for fear that if I gave say a couple of months’ notice, they might just make me redundant right then and there, and I’d then be left without a job for the rest of my stay.
I checked out my contract and it said that I only needed to give two weeks’ notice, so that was exactly how much notice I gave them. We had some farewell drinks on my last day, and they even gave me a farewell gift (an iPod, even though I’m not into Apple products), and I took the tube home that night with a huge feeling of relief for having survived such a traumatic period in the city.
I look back on my experience in the banking industry in a fairly positive way, not really because I enjoyed the work, but it was just good experience in going through such a traumatic time. Having the bank’s name on my resume is pretty cool too, not that I am really planning on using that experience to get another job in that industry, but at least it shows that when I cared about that sort of thing I managed to get through a process to get into that sort of organisation in the first place.
The fate of my wife’s firm
My wife’s boutique investment firm continued to trade through the crisis, and she worked there through to our return to Australia. She really liked working there after she was re-hired, and they obviously liked her too as they paid her a GBP5,000 bonus (tax-free) when she left. I couldn’t believe it!
Unfortunately the firm’s history of selling some Lehman-backed securities caught up with it, and it went into administration shortly after we returned home. As it was a small boutique firm, its owners were on the hook for all of the liability so I believe that her boss actually went broke even though he had bought the business and resurrected it. He was actually quite a nice guy so it was sad to see this happen to him, but there were plenty of similar victims of the GFC I’m sure.
So I hope that gives you some idea of what working life was like in the middle of the GFC in the City of London – it really was a very unstable environment and I can’t think of a better time to have been there if you are looking for an experience. Things have recovered significantly since then obviously, and while there will no doubt be future crashes, it’s unlikely that such trauma will be see again in the near future.
I probably have one more post to write to wrap up this series, and hopefully I will get it done shortly so be sure to check it out.