Author: Aaron Elstein

Lots of people cope with tough times by quaffing a cold beer or two. Drew Weinstein hopes folks will soon reach for one of his.

Weinstein, who last October lost his job as a research analyst at investment bank Cowen & Co., has said goodbye to Wall Street to take a shot at starting Magellanic Brewery. His plan is to hire other breweries to make his beer, a light lager he describes as “a better Budweiser.”

But what Weinstein may have in vision, he lacks in money and experience.

He needs to raise $2 million to get his new venture hopping so it can compete with the nation’s 1,600 other small breweries. Beer is a tough business, the 35-year-old father of two acknowledges, but he figures it’s worth a try—after all, the banking world in which he worked for nearly 10 years is gone for good. “At my age,” he says, “you don’t get many more chances to swing for the fences.”

More than 20,000 securities industry workers in New York have lost their jobs in this recession. And the Wall Street outflow threatens to turn into an exodus over the next two years: The Independent Budget Office forecasts another 30,000 job losses in the securities industry, or 25 percent of the city’s best-paid workers. By 2011, total financial job losses could surpass 77,000, when layoffs at insurers and other institutions are included.

Fearing a devastating brain drain of smart, ambitious people who no longer can afford to stay in New York, the city plans to spend $45 million to turn former Wall Street bankers into entrepreneurs by offering them training, office space and even funding for their startups.

Those who don’t yearn to become entrepreneurs are being encouraged to find work with the federal government, which has embarked on a radical overhaul of finance regulation and will need to fill the ranks of its expanding workforces in New York for everything from the Federal Reserve to the Securities and Exchange Commission.

It’s a painful adjustment for most. Jobs with startups or federal agencies pay a fraction of what the Masters of the Universe used to get, and the long slog of entrepreneurism or the slow drip of government bureaucracy can vex and even infuriate those accustomed to moving quickly. But there’s little alternative, considering how many banks and brokerage houses have collapsed or been acquired, or rely on federal assistance.

‘Profound, lasting change’
“What’s happening is much more than a cyclical downturn,” says veteran Wall Street recruiter Richard Lipstein. “This is a profound, lasting change in the landscape, and everyone will have to learn to cope.”

Andrew Friedman is trying as best he can. The 48-year-old former Bear Stearns executive was laid off twice last year, first after Bear was acquired by JPMorgan Chase, and then a few months later when his next firm, Broadpoint Securities, acquired a rival.

After 10 years of supervising research analysts, Friedman wants to become a banking regulator. He insists he’s ready to accept much less than he ever got paid on Wall Street—a useful outlook, since pay for bank examiners at the Federal Deposit Insurance Corp. tops out at $123,000.

“At this point, pay is not the only consideration,” Friedman says, citing “job stability, a nice pension and good benefits.”

To help unemployed bankers, the New York Society of Security Analysts, a professional group of 11,000, recently arranged a job fair featuring officials from the FDIC, the FBI and other agencies. The event is expected to draw as many as 400 people, quadruple the typical number, and NYSSA officials say they’ve seen a spike in membership so that people can attend the members-only event.

“Two years ago, everyone would have laughed at this,” acknowledges William Drawbridge, NYSSA’s director of membership, marketing and development.

Ex-bankers readily acknowledge the transition to government work can be frustrating. Spencer Cutter, 40, a former Lehman Brothers executive, is getting anxious because he hasn’t heard back from the Federal Reserve Bank of New York after interviews he thought were successful.

“I cannot get the HR person to return a phone call,” he says. “I know I can do something for them, and I know they need people, but for some reason there’s a disconnect.”

Little wonder that former bankers want to try to start their own businesses instead. They will become masters of different universes, but they will have a chance to be their own masters nonetheless.

At an entrepreneur “boot camp” sponsored by the New York City Department of Small Business Services last week, about a dozen casualties of the Wall Street collapse boldly laid out their business plans. The outsized assumptions that inflated the banking bubble can be hard to completely shake.

‘We are not daunted’
Weinstein, for instance, projects that his startup brewery could generate $50 million in revenue by 2013. “The risks are daunting,” he says, “but we are not daunted.”

Wall Street refugees may find that their experience is of little use in a startup.

Investing in long-term goals or sharing knowledge with inexperienced employees is anathema for many star traders or stock pickers, says Ari Kiev, a psychologist who specializes in counseling Wall Streeters. “Their confidence, naivete or arrogance leads them to think that developing a business is easier than it actually is.”

If nothing else, Wall Street vets are often experts in exuding the optimism needed to sell a new venture. Such was the case when boot-camp participant Anita Wong, who spent 13 years at Merrill Lynch & Co., pitched an idea for a stress-relief program called Melt With Anita. The program involves squeezing stress balls and using a foam roller on the hands, neck or feet.

“One hour of Melt With Anita, and you’ll feel better,” Wong says, adding that people still employed could follow the program at work. “It’d be great to do while on conference calls.”

With hordes of suddenly jobless financiers knocking at her door every day, Cheryl Yung is working flat out.

In more than 10 years as a career coach specializing in helping sacked investment bankers rebuild their careers, Yung has never seen anything close to this. After the collapse of Lehman Brothers and rapid acceleration of layoffs all across Wall Street, her work now stretches to 12 hours a day and into the weekends.

“The word people on the front lines use around here is ‘bloodbath,’ ” says Yung, a senior vice president at outplacement firm Lee Hecht Harrison.

The tumult is shifting into overdrive at the companies that help people reassemble their professional lives. The outplacement industry, created largely to serve displaced workers in the Rust Belt, has been becoming white collar-and moving eastward-in recent years.

In the past 12 months, more than 20,000 New Yorkers have lost their Wall Street jobs.

Thousands more are certain to follow in the coming weeks, including as many as half of the 10,000 former Lehman employees now at Barclays Bank under 90-day contracts as the British owner sorts out its staffing needs. Major layoffs also loom at Merrill Lynch as it is merged into Bank of America and at American International Group, which was effectively nationalized.

“Every industry takes its turn for big restructuring and layoffs,” says Celeste Calfe, president of the Association of Career Firms North America. “It’s finance’s turn now.”

Many banking industry executives are warning recently laid off Wall Street workers that their former jobs won’t return anytime soon and they should cast their lots elsewhere.

The tough part is finding positions that pay anywhere near the ones that saw the average Wall Street employee collecting $180,000 in bonus pay alone last year.

“In the past, there was a belief by people like me that you ride the cycle, cut people and expenses when you need to, and when it’s over you rehire,” says Jim Fitzgerald, Wachovia’s regional president for wholesale banking in New York and Connecticut. “That’s not going to happen this time.”

 Networking no longer an option
    For those who assist the professional casualties of Wall Street’s implosion, the problem is not simply the volume of displaced workers. Experts say job opportunities are evaporating all across finance.

“In the past, people got jobs through networking, but now there’s nowhere to network to,” Yung says.

Generally, financial institutions pay for up to six months of career transition services, which don’t come cheap.

Counselors typically charge individuals $500 just to review a résumé, according to Calfe. Outplacement has grown into a $10 billion business worldwide with more than 800 firms, including leaders Lee Hecht Harrison, Right Management and DBM Career Services.

Those who have just lost Wall Street jobs at first tend to view her much like they would a doctor, Yung says. They welcome the help but at the same time are fearful of what they might hear-and she often delivers a bleak prognosis about their staying in finance.

In the end, many financiers will follow in the footsteps of people like Angela Jameson. Laid off late last year by Moody’s Investors Service, where she had worked for 15 years rating the credit of such retailers as Wal-Mart, Jameson began attending weekly two-hour meetings at Lee Hecht Harrison with half a dozen other displaced executives.

Changing careers
    “I had to go before these people and account for everything I did while looking for work-interviews, conversations, networking,” Jameson says. “It meant I had a goal.”

Her focus paid off this spring, when she landed a spot as a researcher at the International Council of Shopping Centers, a trade group.

Others have had to reinvent themselves.

After UBS laid him off, Frank Lugossy bought a wine shop last year in Greenwich, Connecticut. The former equity trader, whose inventory includes bottles of Sauterne and Cheval Blanc, says sales are robust.

“For sure, it’s not the same pay as Wall Street,” Lugossy says. “But I like working for myself now.”

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