As you probably know by now, JP Morgan has announced that it will acquire former rival Bear Stearns for a bargain basement price of $2 share. The deal was helped along by the federal government amid fears that a collapse of Bear Stearns could have disastrous effects on the global financial markets.
Bear Stearns was said to be the the most exposed to risky bets on the subprime mortgage market and a CNN poll shows that most resondents were more annoyed than relieved by the bailout and viewed it as "rewarding bad behavior.’
A JP Morgan spokesman would not comment on plans for Bear Stearns’ 14,000 employees around the world. I know what it’s like to work for a big, historic financial services firm during an unexpected collapse and bailout. I was in the public relations department at Barings, the U.K. merchant bank that financed the Napoleonic Wars and the Louisiana Purchase, when one "rogue trader" (eventually played by Ewan McGregor in the movie about the event) brought down the whole firm.
Eventually, ING swooped in to buy us out and absorb us. That proved to be a dramatic lesson learned at my first job out of college. I went on to experience many more dramatic developments at my places of employment — another corporate bankruptcy, a major merger, and many acquisitions and reorganizations.
I can certainly sympathize with those at Bear Stearns and JP Morgan (and other Wall Street firms battling disappointing quarterly results). It’s hard to stay focused on work when you’re worried about your job and how all of the drama is going to play out. When you work for a big firm like Bear Stearns (or Barings), you don’t imagine you’ll ever have to worry about the whole company going down the tubes. You may expect layoffs and reorganizations, but you don’t anticipate waking up to find that the entire firm is on the brink of collapse and there are Daily News reporters waiting outside your office building.
I imagine that the big financial services industry recruiters will be fielding a lot of calls today. Back in the day at Barings, I was polishing my resume within moments of hearing the news. The encouraging news is that I had a new job lined up before the first round of layoffs hit after the reorganization.
There’s not much you can do to prevent being laid off (the names on those downsizing lists are rarely chosen based on performance), but you can take charge of your career by keeping your options open and developing a solid Plan B. See my post at Lifehack about how to prepare for a possible layoff.