As previously posted on BreakingBayStreet here.
I had just finished my first 6-month rotation at BMO in DCM and was moving on to a new position in securitization in February of 2012. The markets were extremely volatile over the fall of 2011 as the euro zone was falling apart. People were predicting that a collapse of the European Union would derail the fragile recovery in the US and that the world would spin into economic disaster.
My new seat on the trade floor was located in the heart of the building. One morning I arrived at work and noticed that the trader that sat across from me wasn’t at his desk. 5 minutes later, another trader that sat beside the missing person was called away from his desk. 5 minutes later another person was called away from their desk.
None of them ever returned to their seats. It was my first taste of watching people get fired. Before I knew it, there was a news release on the Globe and Mail confirming that BMO had just let go of a number of senior staff. The floor was eerily quiet for the rest of the day as people put their heads down and hoped that they wouldn’t be the next ones sent packing.
Around 9:15 am, one of my MD’s came by and asked if I wanted to grab a coffee. On our walk to the coffee shop, I asked him about the firings and if he thought either of us was at risk of getting fired. His answer forever changed the way that I thought about my career. He said:
Josh, don’t worry about it. It’s good for you to see this happen. It’s good for you to realize early on in your career that people don’t retire from the Bank; they either quit or get fired. If you think you’re going to work here until you’re 60 and happily cross the finish line to retirement, you’re wrong. Use this as motivation to know that you need to work hard, because it’s only a matter of time until your number is called and you’ll be gone too. But work hard and make connections with the right people and you will survive longer than most.
It’s a trade floor custom, that when a respected trader at the bank is walked off the trade floor for the last time, everyone on the entire trade floor rises to their feet and claps. My MD told me that when his time came, he hoped his hard work and dedication would be enough to earn him this ceremonial ovation. A person’s entire career gets summed up into the 30 seconds it takes to walk out the door and then they are forgotten forever.
Since reading Jay’s post, A Bloodbath on Bay Street, I have been thinking a lot about this experience I had in my first year at BMO. Not only did it teach me that you need to work hard and navigate internal politics effectively, it also taught me that no matter what you do, the turnover rate in the industry is high and not even the most talented are free from risk.
People are continuously getting fired and quitting. When the market is turbulent, banks cut back on hiring and let go of the underperforming staff. Teams are then kept lean until profits return to the desks and work flow picks up.
Eventually, the tides will turn and banks will need to hire again to replenish staff and fill new positions. No matter the risks and the odds against you, if you are passionate about working in capital markets you need to be preparing now for when the good times return. With hard work, skill and a little luck, you might just be able to avoid the chopping block and ride the wave of success to the top.
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