EDITORIAL JULY 29, 2005

The Real World Of Employment...Circa 2005
Cont.

Today we read that Morgan Stanley will lay off a few people.
1,000 - to be exact.

We also read about a New Hire: Tim Nguyen, 22, who joins Merrill as a "junior analyst" in San Francisco.

Here’s life, a la Tim: He’s getting $50,000...or maybe a tad more. No signing bonus (a thing of the past?) but there is a performance bonus... of up to half his salary, depending on results for the year.

Is Tim a Rocket Scientist? He was an A- student at Berkeley. Not too shabby.

As an undergraduate, he ran a tiny Fund and was "competitive" with the S&P for the same period. (That’s about par for the course.)

His big win was researching Google and deciding that their shares were undervalued at $220...(now trading at $293!). A good call. Google looked to some people like a wildly overpriced stock.

Tim says he is "not in it for the pay." He’s looking at it as an opportunity to gain a set of core skills to use in the future... including burnishing his writing, marketing and quant abilities, which he believes he can "parlay into most any career." Hmm.

What’s Tim’s life like? He gets up at 4 a.m., is in the office by 5 a.m., and spends his day updating Excel files on 30 companies he tracks, including
AmEx and FannieMae. He spends a lot of time updating Power Point Presentations...his and those of his superiors.

On good days, he is out of the office by 5:30 p.m., and off to buy groceries,
eat dinner and study for licenses he wants. He hits the sack at 10 p.m.
This means he is putting in 65 hours a week...up to 75 when things are
hotting up. (Get a Life, Tim!)

Tim: "I can see myself doing this for 5 or 10 years."

So, that’s the Real World. Hired at 22...worked like mad for a decade... then, just maybe, he will be out on the next Downsizing Wave. (Tim’s area...research...has lost 55,000 people during the past 5 years.)

The Morgan Stanley picture is somewhat different. MS has 10,000+ brokers. They are cutting their recruitment in half, from 2,400 to only 1,000. (Everyone needs young blood). But the cuts will be from "the weakest performers." (How’d you like THAT to be on your resume?)

The firms acting president, Zoe Cruz, is attempting to strengthen the broker force to retain and attract the top guns. Unfortunately, it does not help Zoe that floating around the Street is a rumor: Further cuts will be made to downsize in advance of a possible sale.

Oh, ain’t life grand? At 22, you are expected to work like a field hand. At 35 or so...if you are not a top producer, you get pruned out. And...after that...you can be "too expensive" and get right-sized out of your lifetime work. Are you ready for all that?

Richard Calderhead    FortyPlusNy/July 29, 2005

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