Wall Street’s Sleepless Nights

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Starting jobs at investment banks are notorious for long hours and a lot of pressure. But junior bankers say the pandemic, booming markets and other factors are making their grueling jobs even more intense. Some are near, or past, breaking point.

Burnout on Wall Street became a hot topic of conversation this week after a group of 13 anonymous first-year analysts at Goldman Sachs circulated a slide deck — meticulously branded, with footnotes — that described how 100-hour weeks were taking a toll on their mental and physical health. “I’m in a really dark place,” one wrote.

Other junior bankers have since spoken out about their own difficult working conditions, and their superiors have reacted with a mix of sympathy, solutions to reduce the stress, and scorn, saying that long hours are a generously paid rite of passage. What should banks do, if anything?

Over the past week, readers of DealBook — including current and former bankers around the world — have written to us in droves, and a selection of their responses are included throughout this newsletter. Many requested anonymity for fear of losing their job or endangering future prospects, as did most of the early-career bankers who shared their experiences in interviews.

“I knew I was worked like a donkey, but quid pro quo. I could leave, work fewer hours and make less money.” — Anonymous in London

“There is no money that rewards the mental and physical harm that investment banking does to you.” — Anonymous in São Paulo, Brazil

How the pandemic changed everything

In an office, workers can more easily commiserate with peers and learn from superiors, said one first-year analyst at JPMorgan Chase in New York. But stuck at home, “I just send emails constantly and get comments: ‘Please fix this and send it back.’”

“I did sign up to be an investment banking analyst,” said the person, who was recruited as a college sophomore and interned at the bank before taking a full-time position. “What is going on is not what I signed up for.”

A former Citigroup analyst in New York who left investment banking last summer said that in normal times managers would often be busy traveling, or would leave the office at night, which allowed analysts periods to focus on their existing work without being assigned new tasks. Those breaks disappeared during the pandemic.

“They were always available and working late,” he said of his managers during the pandemic. “They knew we were stuck working late. We couldn’t do anything else. So there was no separation from work and home.”

The analyst, who worked at Citi for three years, said virtual work was particularly hard on the first-year employees. “They weren’t able to learn how to be a banker in the office. They learned it virtually, and it’s so much harder,” he said. Working virtually, he believes, has also made it more difficult for new analysts to support each other. “They just get the downside to banking,” he said. “They don’t get the upside, the relationships.”

JPMorgan and Citigroup declined to comment.

As the work has become more isolating, the amount of it has exploded. At this point in the year, according to Dealogic, the value of debt issues are running a third higher than the previous 10-year average, acquisitions are more than double, and initial public offerings are some 15 times higher, propelled by the surge in blank-check shell companies known as SPACs, or special purpose acquisition companies.

“We recognize that our people are very busy, because business is strong and volumes are at historic levels,” Goldman Sachs said in a statement in response to the first-year analysts’ presentation. “A year into Covid, people are understandably quite stretched, and that’s why we are listening to their concerns and taking multiple steps to address them.”

On Sunday, Goldman’s chief executive, David Solomon, sent a memo to employees in which he promised to enforce the firm’s policy against working on Saturdays, to shift bankers to the busiest desks and to hire more entry-level employees. A day later, Citi’s C.E.O., Jane Fraser, introduced “Zoom-free Fridays” and said that most employees could work from home for two days per week when the firm reopens its offices.

Other banks decided to work in the medium they know best: Money. Credit Suisse on Wednesday said that it would give lower-ranking employees a $20,000 bonus to acknowledge their work during a period of “unprecedented deal volume.”

“I think there needs to be more regulation to fix this. If there are rules around working hours it’s logical to expect that more analysts would need to be hired, which could result in fresh-off-the-boat analysts not getting a six-figure salary.” — Fahim Muscatwalla in Dubai

“Junior bankers can expect to work very hard, but they are often misled into believing times have changed and they won’t be treated like a disposable number cruncher and punching bag.” — Anonymous in San Francisco

Policies don’t work without accountability

Announcing limits on work is one thing. Enforcing them is another.

This debate is not new. In 2013, a 21-year-old Bank of America intern died of an epileptic seizure after reportedly working for long stretches without sleep. Though the coroner found no proof that exhaustion caused the seizure, the incident caused many banks to examine their work policies. Bank of America recommended that junior employees take at least four weekend days off per month. Goldman capped intern work days at 17 hours and announced its policy against working on Saturday.

Suicides among junior bankers in 2015 prompted a similar wave of announcements aimed at giving employees more time away from work. JPMorgan announced a policy called “pencils down” that encouraged employees to take the weekend off and said it would monitor weekend work.

Then, as now, there were doubts that the policies, however well-intentioned, would be enforced. And during the pandemic it is particularly difficult to track when employees come and go. “Every two or three years there’s another analyst uprising, and nothing ever happens,” said the former Citi banker. The response among his former colleagues to the notion of Zoom-free Fridays was “a gigantic eye roll,” he said.

In order to evaluate how “protected weekend” policies work, Deniz Okat of the Hong Kong University of Science and Technology and Ellapulli Vasudevan of ESCP Business School in Paris analyzed data from 16 million taxi rides to or from 10 New York City banks between 2009 and 2016. The results, which they published in a working paper this week, suggested that when banks implemented no-Saturday work policies, employees indeed worked less on Saturdays. They also worked late hours during the week to compensate. “It is difficult to change bank culture by decree,” the authors wrote. “Well-meaning policies can have unintended consequences.”

Part of the problem, said the first-year JPMorgan analyst, is that managers aren’t always held accountable for following bank policies. Not assigning work on weekends would mean pushing back on senior managers to say, “Why? What’s the deadline? Is there anyone who can take care of it?”

“I don’t think anything will change until structurally they’re incentivized to do something,” said the former Citi analyst. One way to do that would be to compensate desk heads on measures like retention rates for their analyst class.

“I retired from a large financial institution where we met several times a year with the major dealers. Each presentation included a pitch book that was inevitably way too long and included extraneous information that you knew the analyst spent hours preparing, usually late at night. There were probably three key pages that we focused on.” — Ken Quann in Randolph, N.J.

Working more efficiently would help

Many of the horror stories that young bankers tell about their work hours involve cramming on projects that never get used, making seemingly superfluous changes and receiving assignments shortly before they’re due that could have been made in advance.

A vice president at a private equity firm in New York who worked as an analyst at JPMorgan a few years ago remembers being assigned work based on offhand comments a client made at a meeting. By the time he presented it, the client would often have forgotten about it. “You’d go to the meeting and someone would say, ‘I didn’t know I asked for that,’” he said. “And you’d just spent 80 hours on it.”

Banks have acknowledged that working more efficiently could be a possible solution to burnout. Some solutions have been geared toward remote working, like requiring fewer junior bankers to attend Zoom calls so they can focus elsewhere and enforcing limits on the length of meeting materials. (Citi, for example, has limited pitch books to 15 pages.)

Another obvious solution, many say: hire more analysts.

“Rather than complaining, perhaps these analysts should soak it all in, learn as much as they can, and thank their managers for the amazing opportunity.” — Greg Hillson in Alexandria, Va.

“If you are a first-year analyst, no one wants to spend time listening to your opinions. In all likelihood, you know less than you think you do.” — Anonymous in Vancouver, Canada

Should banks change?

Some argue that there’s not a lot that can be done to change the way big banks work. “It’s not like they’re going to say, ‘Sorry, we couldn’t finish the paperwork on this $65 billion deal,’” said Andrew Klug, who in 2008 interned for Citi in New York. “No, the stuff needs to get done. If you’re not the person who can do it, that’s fine.” He now manages commercial photography projects primarily in the fashion industry where, he notes, “People are working those hours and not getting paid high salaries.”

There’s also the question of sympathy for people fresh from college whose bonuses alone can be higher than the average American’s annual income. The job offers unique exposure, responsibility and access.

“No one is forced to take a high-pressure, long-hours, high-paid job,” said Kenin M. Spivak, the C.E.O. of a boutique investment bank in Los Angeles who worked at Merrill Lynch in the 1980s. “Those who choose to do so should put on their big person pants and either perform or get out of the way.”

Whether or not anyone thinks junior bankers deserve better working conditions will not be what determines whether they get them. Investment banks are increasingly competing against other industries for talent. In 2017, the share of Wharton business school graduates who chose jobs in technology started to surpass the share that went into investment banking, which was previously several times larger.

Meanwhile, younger generations are demanding more flexibility in where, when and how they work.

“They always want the top talent,” the first-year analyst at JPMorgan said of investment banks. “But you need to do something to attract the top talent.”

What do you think? How can banks ensure that junior employees get a break? Should they? Let us know: [email protected]

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