Business | General
Wall Street jobless bake cakes
Jessica Walter didn't go to Harvard University to study cupcakes, but they're what she does since losing her job as a vice-president in credit strategy at Bear Stearns.
- Bloomberg
- Published: 23:51 August 16, 2008
New York : Jessica Walter didn't go to Harvard University to study cupcakes, but they're what she does since losing her job as a vice-president in credit strategy at Bear Stearns.
"I want to teach kids to cook," said Walter, 27, who founded Cupcake Kids! in New York to provide birthday parties and cooking classes for children. "The goal is to have this be my full-time job and make enough to live."
Wall Street professionals are trying new careers, and fetching smaller salaries, amid the elimination of 76,670 investment jobs in the Americas following the global credit crunch that started a year ago, according to Bloomberg data.
Bankers are "buying businesses for themselves, moving west or to Europe, including Russia, or to Dubai," said Jeanne Branthover, managing director of Boyden Global Executive Search in New York. "They're also moving totally outside what they do, buying a retail store or a ranch."
About 33,300 finance jobs in New York City, or 7.1 per cent of the 2007 peak, will be cut by June 2009, the Independent Budget Office estimated in a May report.
"The job market is in the worst, most chaotic state I've ever seen it in fixed income," said Michael Maloney, who recruits finance professionals for Maloney in New York. "I've been doing this for over 30 years and I've never seen anything like this."
Half the people working in debt sales, trading or research in New York at the beginning of 2007 will have been fired by the end of this year or won't get a bonus, Maloney estimated.
Jeff Salmon said job jitters prompted him to swap investing in asset-backed securities at Bank of New York Mellon for keeping the books at a hair salon. He and his wife, Olga, opened a Great Clips franchise in New Jersey that offers $12 haircuts for both men and women.
"The structured finance market is so bleak right now, it makes sense for us to focus our energies on this," said Salmon, 49. "It's refreshing to not have to worry about whether I am going to have a job next week."
Traders and bankers who leave finance can expect to earn a fraction of what they used to make.
Compensation for employees on Wall Street averaged $399,360 in 2007, compared with $62,390 for New York City jobs outside the securities industry, according to the state comptroller's office.
Goldman Sachs, which has cut 1,500 jobs, paid its employees an average of $661,490 last year.
Walter, who studied econ-omics at Harvard, is among those welcoming the opportunity to try something radically different.
"The biggest thing that I enjoy is being the jack-of-all trades of having my own business," she said. "It's a challenge."
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