Gadgets add complexity to brutal bank layoffs
(Reuters) - In the high-tech, gadget-addicted world of investment banking, layoffs are becoming more complex and brutal as firms try to stop sensitive data leaving with employees.
Sackings are usually swift, with bankers escorted out, a few belongings thrown into boxes and Blackberries and phones disabled the minute they get their marching orders.
But weeks of trawling through old emails and planning software lockdowns now precede and follow the job cuts that are happening in thousands, adding a new layer of indignity to the process.
"It used to be that you would take away any access to the building and maybe prevent someone from lifting their Rolodex," said Stephen Bonner, a former Barclays executive now a partner in the information protection business at consultancy KPMG.
"Now there is extensive compliance, with for example reviews of the last six months of email activity, for signs of a large amount of material being sent to personal accounts."
Companies have to make sure they can block access to work systems that employees may be using on their own computers, while occasionally calling in lawyers to ask fired staff to destroy data they may have already downloaded.
The crackdown has taken on new relevance after a series of banking scandals such as the rigging of Libor interest rates. Records of emails and voice mails underpinned a case by regulators against Barclays for manipulating Libor, which was settled in June.
Layoffs in banking have long been a particularly brutal affair, justified by firms because of the sensitive information handled by deal advisers and traders.
Anecdotes abound about the half-eaten sandwiches left behind by colleagues called to a meeting with their manager and human resources, never to return. Those allowed to collect their belongings often do so with a security escort.
More bankers are likely to get a taste of the dismissal procedures in the coming months as economic woes hurt revenue.
Deutsche Bank and Nomura have been among those shrinking headcount again recently, with layoffs at major players adding up to well over 130,000 since 2011.
With hundreds of bankers sometimes leaving on the same day in big redundancy rounds, the huge IT operations take meticulous planning, sometimes with unnerving consequences for staff.
One analyst laid off last year along with his team said their Blackberries stopped working for 15 minutes a week before they were unexpectedly laid off. In retrospect they believed it had been a practice run.
"That made us feel a bit sick," the former analyst said, speaking on condition of anonymity.
But recurring incidents of data theft, and other breaches and scandals mean banks will likely only step up their checks.
"I've never yet run one investigation during a round of redundancies where we haven't found things that were concerning for the company," Bonner at KPMG said.
A former Goldman Sachs computer programmer was recently charged with stealing a high-frequency trading code from the firm before leaving for a job at a start-up.
Systems sweeps can extend to looking for signs of downloads onto memory sticks in the months before an employee's departure.
Banks store valuable client data in relationship management systems for example, listing intimate details of their every transaction, which junior bankers could try to take with them.
While preventing these breaches is not always possible, banks will notify each other if they believe former employees have taken data they were not entitled to and collaborate between firms, Bonner said.
As in other industries, there is also the risk that a disgruntled, fired employee will return to his desk and send off angry company-wide emails -- but worse can happen too.
A computer programmer at U.S. mortgage association Fannie Mae was convicted in 2010 for planting a computer virus designed to destroy all the data on its servers the day he was fired.
WEDDED TO GADGETS
Most bankers do leave on good terms, however -- usually a condition to getting a generous redundancy payout.
But although many concede big packages are the trade-off for working in such a cut-throat world, the impersonal format of layoffs is still tough, and dependence on technology such as Blackberries has made things worse.
Being suddenly cut off from the systems so many are wedded to can exacerbate the feelings of worthlessness and bereavement people experience during redundancy, psychologists say.
"People are handed these gadgets and tools...and it becomes entrenched in their way of being," said Michael Sinclair of the City Psychology Group. "It's what they do at night times, and it's about 'who am I'."
The lack of a human connection in banking redundancies can add to the problem, he said, as does the stigma attached to seeking counseling, which can be seen as a weakness.
But the large scale of redundancies at banks and their frequency, correlated to cycles of rising and falling markets, make it unlikely they will be handled any differently, despite efforts to give employees and managers more training to cope since the 2008 financial crisis.
"The only other way in is the more personal way, and I don't know how one could do that," said Kirsty Tifft from The Career Psychologist, who previously worked in finance, including at Morgan Stanley and Merrill Lynch.
"Once you go down that route, you have to invest a lot of time. When hundreds of people leave on the same day, it's hard to see how that could be managed."