In this situation, do you think getting "flexed down" by your company is overall better or worse than companies just eliminating your position entirely?
Edit: Did someone read some snark in my question? It was an honest question.
Edit: Did someone read some snark in my question? It was an honest question.
It's not about being squeamish about eliminating a position, companies have no concerns with that.
If that's the case, wouldn't it make sense to offer a 'stable' higher salary to an employee, and then sack them when it's financially beneficial to the company? I think the company does indeed have a concern with that - it becomes known that a particular company just thins the ranks every 18mos, and they'll have fewer folks lining up to take jobs.
On the other hand, even if the salary is lower, an employee can be more confident in keeping at least a modicum of income in lean times, and can also 'compete with colleagues' when bonuses are available. The perception (of the employer to the employee) is valuable to some extent.
Depends on how onerous a task it is to rehire when things pick up again ... I presume that’s part of the reason foe generous separation packages when a company actually must let people go ... at least you won’t have a bad reputation militating against you!
I don't think this is a thing at the high levels sadly. Both the employer and employees have moved away from the job security concept long time ago.
On Wall St., if you're older than say 45 yo and make a good salary for your years of experience, you have a target on your back. This is somewhat the same for tech, but stand outside any bank's office in Manhattan and you'll notice the youth of the employees.
When I was at university, the people I knew who wanted to work in finance seemed to be planning to work stupidly hard for some number of years and make a load of money and then retire. So maybe an alternative reason is that many people choose to retire at a relatively young age. But those people didn’t exactly have much actual experience in investment banks and so maybe they were just wrong or maybe those ideas are more predominantly held by people who are keen on investment banking while in university than in investment bankers at large.
Or maybe the old people all turn up at a different time or spend all their time meeting with clients outside their office (or half the time with clients so they arrive at the office at weird times), so you just don’t see them if you watch.
To be clear I don’t want to suggest that I disagree with what you say, just that there may be other forces at play than a bank’s desire to fire senior staff.