If Bear staff is cut, tough U.S. job market awaits

NEW YORK Mon Mar 24, 2008 11:29am EDT

1 of 2. The wind blows the JPMorgan Chase flag outside its building in front of the Bear Stearns building across the street (R) in New York, March 17, 2008.

Credit: Reuters/Chip East

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NEW YORK (Reuters) - It will come as no surprise to some Bear Stearns BSC.N employees if they lose their jobs as a result of the company being sold to stave off bankruptcy.

Financial markets had been rife with speculation for weeks that the fifth largest U.S. investment bank was in trouble because mortgage bond holdings went bad.

"Bear Stearns professionals have been sending out their resumes, and this flow will only increase as the week goes on," said Michael Karp, chief executive officer of Options Group, a global executive search and strategic consulting firm based in New York. "The current market is not as bad as 1990-1991, but it's getting there."

On Monday, CNBC television news, citing unnamed sources, reported that JPMorgan Chase (JPM.N), which agreed on Sunday to buy Bear for $240 million, expected to cut about half of Bear's 14,000 employees.

Like other Americans, some of them would face a parched jobscape as the U.S. economy weakens and the cost of living rises. The U.S. unemployment rate in February was 4.8 percent and payrolls fell by 63,000, the second straight month of payrolls decline.

In the first two months of 2008, U.S. financial companies cut more than 20,000 jobs, according to employment consulting firm Challenger, Gray & Christmas Inc, as they racked up losses triggered by the collapse the subprime mortgage market.

Karp said Bear Stearns' mortgages, credit derivatives and structured finance divisions would be hardest-hit, along with investment banking, where there is overlap with JPMorgan.

"I think it will be difficult for a lot of the people who lose their jobs because of the state of the industry right now," said Paul Sorbera, president at Alliance Consulting, a financial executive recruiting firm based in New York.

But Sorbera said, while it may take time, investment bankers, traders, sales people and research analysts were in a better position to find jobs at rivals and buyside firms than back office staff.

WILL YOU TRAVEL?

Gustavo Dolfino, president of recruiting firm WhiteRock in New York, said distressed and high-yield debt, commodities and foreign exchange sectors were doing extremely well and junior employees would likely be snapped up because of strong demand for number-crunchers.

And, opportunities exist for people prepared to be "open-minded and creative" in terms of location and career path, said Gary Goldstein, chief executive officer at Whitney Group LLC, an international executive search firm specializing in financial services.

"It's very, very tough out there, as you can imagine. But it's not completely bleak," he said.

Regional investment banks and some boutique investment banks see the current environment as an opportunity to hire talented people without having to buy them out of lucrative Wall Street jobs, Goldstein said.

"Employees need to be flexible on where they go and not be stuck on working for a big, fully-built out firm because those firms are, quite honestly, not really hiring," he said.

"And they have to be creative with their skillset. There are corporate development jobs, or in-house M&A, if people are creative and willing to be flexible."

Al Daniels, a recruiter in San Diego specializing in equity sales and trading placements, said problems on Wall Street are mainly in fixed income, and that hiring on the equities side could pick up later this year.

"Firms are being extremely cautious about who they are bringing in," he said. "Fixed income is toast for the time being. You won't have this many people working in the fixed-income business."

And Asia is a good option for those prepared to move even farther afield, the recruiters said.

"There's a strong movement of brains to Asia because Asia is on fire," said WhiteRock's Dolfino.

(Additional reporting by Dan Wilchins in New York, Editing by Toni Reinhold)

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