writer, broadcaster, portfolio woman

What happens when high-flyers in the finance sector fall to earth

The Times, February 19th 2013

It can be a long way down, or a happy release


They are used to earning exorbitant sums, being lavishly dressed, housed, fed and travelled, and trading billions as if they were ten-pound notes. They use taxis, not Tubes, and eat out without a thought. If they want something, they buy it. If they have a problem, they pay someone to solve it. So how does it feel to lose all that in a matter of minutes, when your pass doesn’t let you into the office and you are escorted to human resources and told to leave the building without clearing your desk?

That’s what has happened to 132,000 people in financial services since the 2008 crash. And it’s still going on. Last week, Barclays announced that it would cut 3,700 jobs. Some 25,000 City jobs were culled in the last three months of 2012 and another 18,000 will go in this quarter, according to the latest financial services survey from the Confederation of British Industry (CBI) and PwC. Some have called it a bloodbath. It’s nothing if not messy for the victims.

“There had been absolutely no warning, no bad reviews, no indication of disappointment in my performance, no sense of crisis at the firm,” says Luke Morley, an American who moved to London in 2011 to help set up a hedge fund but was “let go” in September. “It was pretty much, ‘Walk out of the door.’ No pay-off, no recommendation.

I couldn’t even take the things from my desk. It was quite shocking.”

He is now living on his savings, which he fears won’t last him much beyond February. He is trying to get another job in finance, but nothing has yet come up. “I’m left sitting here in a new country, a new city, with no job, no recommendations and no money. I had no idea how expensive London was and it’s not an easy city. People are colder than I expected. It’s a rough place.”

Another hedge-funder, Jamie Troughton, was laid off in 2011. He is in his early 50s and accepts that it’s no job for a man of his age. But after 30 years in finance, he is at a loss to know what to do next.

He left with a year’s salary, and has quite a cushion of savings. “But I didn’t cut back for a while as I was slightly out of control and directionless. It takes time for the drain on savings to catch up with you. Anyway, most of my outgoings are fixed, like school fees and insurance. I’ve just stopped taking taxis and turned the heating down.”

Jamie’s GP recently diagnosed depression. The day I spoke to him, he had spent all morning lying in bed, “playing on Twitter”. He can’t face opening his post, so his sister comes round once a week to help him. “If I’ve changed a light bulb, I feel I’ve achieved something in the day.” As for going to see headhunters, or following up job leads from friends, “I’m being completely hopeless about it. It’s very depressing.” He is reluctant to go on antidepressants because of the effect they may have on his sex life. “But my sister says my girlfriend’s going to have to decide whether she’d rather I was depressed or impotent.”

Charlotte Saunders has seen her husband go through this cycle twice in ten years. He was first laid-off in 2002 and then again last year. “It’s terrifying and awful. There seems to be a pattern to it. First there’s a period of collapse and shock when you don’t do anything and you have to recover mentally and physically. The lead-up to it is just as bad, as you can see it coming. You feel like you’re in front of a firing squad. After that you have to gather yourself together.”

The first time, all their children had just won places at boarding school, and the couple had a huge mortgage, so there were scary financial commitments to be met. Charlotte managed to find herself a full-time job for the first time since she became a mother. But still their house was a month away from repossession and they had almost run out of savings when her husband Robert managed to find another City job.

So when Robert lost his job again last year, all the old feelings of dread and anxiety re-emerged. “You feel like you’ve been punched in the solar plexus. You wake up every morning and it’s like a death.” Charlotte had already learnt how to be thrifty with the food shopping. The family cut out holidays, restaurants and trips to the theatre, all the discretionary spending they could manage. “I was surprised at how the most important things in your life are your health, your family and your friends. The added extras don’t actually make a lot of difference.”

She says that both periods of unemployment have been a real lesson to their children, who are now nearly grown-up. “I’ve said to them: ‘Don’t take on huge mortgages or have too many children and send them to private schools. You mustn’t have big ideas about how many holidays or cars you should have because the horror of not being able to pay for them is so much worse than the joy of having them.’”

Recently, Robert has again managed to find another job in finance after eight months out of work, and Charlotte feels she can breathe again. Such anxiety can put awful pressure on a marriage, though. “It’s a real test of your relationship. If we hadn’t been happy together, it would have sent us over the edge.”

James Stevenson is a psychotherapist who knows all about the strains of working — and not working — in the City. He has many patients who are still in their jobs, but worry terribly when they experience a setback such as a bad performance review or a lower bonus. “The men particularly tend to have their self-worth bound up with money and a sense of having to be powerful. Very often their parents have put into them the idea that they have to be the best. So they become perfectionists. It’s probably got them the early promotion, but as they get older, it becomes more and more untenable.

“These people are often dependent on the responses they get from other people. They have to be seen as very powerful or very rich or very clever. What they need to accept is that there is a sense of self that can exist without getting this external affirmation in the form of praise or bonuses.”

Women, he believes, tend to find it easier to diversify their sources of self-belief — not just pegging it to their career but also taking solace from being in a loving relationship or being a good mother. These high-achieving men, if they look elsewhere, are more likely to use measures such as being a brilliant sportsman or being highly sexually active, both of which also come under attack as they get older.

Then, if they lose their job, says Stevenson, “that perfectionism thing is shattered and what is behind it is its opposite — feeling utterly worthless. That’s when you get a breakdown.”

Not all City chaps are so psychologically fragile, and some do manage to find another job in finance. Amanda Smithson, a managing partner at the Blackwood Group of headhunters, sees plenty of them coming through her office, all with excuses for why they were fired.

“There’s always this slight cloud of ‘Why was this person let go? Why not another?’ But if they’re part of a whole team that’s been laid off, then largely they’re re-pottable.”

Some, though, decide that they don’t want to be re-potted — they want to pursue a completely different life.

That’s what happened to Oliver Preston, now 50, who lost his job at Lehman Brothers back in 1995. He had never really wanted to go into the City — his headmaster suggested art school — but his father insisted on university followed by banking, so that’s what he did for ten years until the dreaded summons to human resources.

“It was pretty shocking when it happened. Two weeks before, I’d done a trade for £1 billion and the whole dealing floor applauded. Then I was told, ‘We’d like you to resign.’” He came home to several job offers from other banks but first he had a couple of sessions with a man from an outplacement company, hired by Lehman Brothers to help him with the transition.

Oliver had always been an enthusiastic amateur cartoonist, and at the second session he took along his portfolio of work. “Do you realise,” asked the outplacement man, “that every time you talk about the City you look down and every time you talk about cartoons you look up? I think you should consider very seriously what you do next.”

So he did. In his first year, he set himself the goal of having cartoons published in The TimesThe Spectator and Punch, and achieved all three. He also pursued what were only dreams before: moving out of London, getting a dog, sitting in cafés dreaming up cartoons, and having leisurely lunches with his dad.

It wasn’t easy; he reckons it took him seven years and a lot of work to be financially watertight, and he did at times consider going back to the City. But now he has a publishing and greetings-card business, he is chairman of the Cartoon Museum, and he can afford to take his family to live in Switzerland from January to March. “I’m a million times happier,” he says.

“When I was at Lehmans I felt like I was on a train, which I couldn’t get off, and it was completely out of my control. You are paid money, then more money, you buy a flat, then a house and each time you have a bigger mortgage. When I got off that train, I thought, ‘Thank God for that!’”

Another former banker, who chose to get off the train, is Laura Brown. Now 28, she is teaching business and economics at Cardinal Pole Catholic School, a comprehensive in the East End of London. In her previous jobs, working for Northern Rock and then Bank Leumi, “I was just making rich people richer, making money out of money.

I realised I wanted to make poor people richer instead.” So she took bar work for a year on top of her City job, working an 80-hour week in order to save enough to pay for her teacher training. It was a tough time, she admits.

She is now earning only half what she did in the City, and has had to move to a cheaper flat in a less desirable area. But what she has lost financially she has gained in life satisfaction. “I’m much happier in myself,” she says. “It’s given me a whole new perspective on things. When I meet people driven by money now, I don’t have much in common with them. I did before, but now I find them boring. I don’t think I have to buy everything now. I’m loving it!”

Some names have been changed.

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