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"I have this vivid memory of that Sunday,” Laurie Barnett, tells me over the disco music pumping into the midtown Manhattan restaurant where we meet, “when everyone figured out that Lehman was going bankrupt and Merrill was merging with Bank of America, and everything basically went to shit.” It’s hard to picture Laurie, 25, athletic and tomboyishly pretty, being a casualty of anything, but, as she’s eager to tell me, she was present at the destruction, an analyst at a distressed major investment bank, when on September 14, 2008, the illusion of Wall Street as an inexhaustible moneymaking machine ceased to exist.
“Just like everyone has their own story from 9/11,” Laurie says, “everyone has a Crash story. I was at home, hungover on a Sunday afternoon, and my friend who works at Lehman said, ‘I just got an e-mail from a managing director who says he’s packing up his stuff and I should too.’ She used to basically live in her office and had everything in her cubicle, like five changes of clothes. Later in the day, she called: ‘Can you actually come help me bring stuff home?’ I walked in the door with two rolling suitcases, and every single person was in the office, and there were news cameramen outside asking, ‘Do you have anything to say?’ All the tourists were looking on. And we had the suitcases with her clothes and company training books in them and she’s carrying her plant in her arm, and we turned to each other and said, ‘We’re going to remember this for a long time.’ It was an iconic moment.”
The story of how a handful of companies concocted exotic financial instruments that pumped up the housing bubble and their own profits, nearly bankrupting the entire country when it burst, has been front-page news for a year. But behind the headlines is another story about a generation of young women like Laurie. They’re the so-called Generation Y, programmed by their baby boomer parents for success, coming of age in an era of almost unprecedented affluence, landing choice corporate jobs, including on the male bastion of Wall Street, in record numbers. They now find themselves the expendable shock troops in a campaign of corporate “downsizing” that has reached its nadir in Manhattan.
The mass layoffs have occurred at a few investment banks that were swallowed by their healthier siblings. But in the ensuing stock market crash, the pain radiated out from Wall Street to the rest of the country as credit froze, consumer confidence plummeted, and businesses all over the country went belly-up, pushing the national unemployment rate to 9.7 percent in August, the highest since 1983. Also hard-hit, according to Batia Wiesenfeld, PhD, a professor of management at NYU’s Stern School of Business, was the lively mix of industries that feed off an idea of luxury bankrolled by the soaring stock market and those Wall Street bonuses: real estate and retail and art, and the media and PR companies that spread the good word— basically, those glamorous-sounding jobs for which Sex and the City–emulating, high-achieving young women have long flocked to Manhattan and other cosmopolises.
Now many of those women find themselves at a premature professional crossroads, their expensive and hard-won degrees languishing. Mandy Hill, 27, had been a fine-arts major at the University of Michigan, but she lucked into an entry-level job at a Manhattan hedge fund because the markets were booming and the finance companies were hungry for young talent with unconventional backgrounds. “As long as you were bright and willing to work,” Mandy says, “they were happy to teach you.” After nearly two years as an analyst, she left finance to get a master’s at Sotheby’s Institute of Art in London so she could segue to a career in the art world. “I finished my dissertation last October,” she says, “when the world fell apart. Christie’s and Sotheby’s laid off something like 25 percent of their staff, so forget about applying for a job there.” She even struck out in an interview for a gallery assistant job with a family friend: “They got so many applicants, guys who could build the crates and hang the shows. It’s been a little discouraging,” Mandy says. (“People who take jobs for love, in fashion or art, for instance, now often find themselves in worse shape than the people in finance because those industries take longer to recover,” Wiesenfeld says.) Now Mandy is living at home in Wayne, New Jersey, with her schoolteacher mom, and commuting to the city by bus for sporadic auction-house work. Her trademark Gen Y self-esteem has been sorely tested. “I know I’m smart,” she says, “and I think I’ve got a lot to offer, so I figured I’d have no problem getting a job. And that was kind of my mistake.”
A varsity athlete with a nice GPA, Laurie was recruited by her firm when she was a junior at a top Northeastern college, lured into the fold with a well-paid and highly social summer internship.“You go to a lot of events, a lot of drinking,” she recalls. “It’s kind of like rushing a fraternity or sorority.” (That alone was a sign of gender progress on Wall Street—almost a third of her “class” were women.) Over the summer, she was exposed to all aspects of the investment business, including creative ways of slicing up, repackaging, and selling different grades of mortgage debt, the so-called Collateralized Debt Obligations. “CDOs are what got us into this mess in the first place,” she says, “but in the summer of ’06, it was blockbuster, with everyone making a ton of money. It was basically running a lot of quantitative models. I didn’t get it, and I was right not to get it. You didn’t actually make anything, you just found new ways to use money to make money.”
By the time Laurie took her place at the leveraged loan desk in fall ’07, credit had dried up nationwide and “my business had practically stopped being a business,” she says. “Some people came in at 10 a.m., left at 3 p.m. Others brought footballs to the office. And everyone went to the gym in the middle of the day.” Not that doing nothing and getting well paid for it added up to much fun. “There were definitely times when I had a pit in my stomach,” she says, “I figured there was a 50/50 chance I was going to make it.” She didn’t, washed out in a wave of October firings.
No one disputes that in this insecure economy, the psychological impact of women being laid off in finance and its dependent industries—the best and the brightest, the leading edge— reverberates loudly. So how will this generation of young female overachievers cope with an underachieving economy? Business consultant Judith Bardwick, PhD, author of One Foot Out the Door: How to Combat the Psychological Recession That’s Alienating Employees and Hurting American Business, worries that too many young women are “hopelessly unprepared” for a job market that’s now in “a permanent wartime condition.” In part, she blames overinvolved boomer parents (“ ‘helicopter parents’ who swooped down on whatever activity their kids were involved in and insisted they were megastars”) who have left Gen-Yers with sometimes unrealistically high expectations.
“These were the incredibly bright young women who, as I like to say, built their first church in Nicaragua at the age of two and were working on their résumés before they could talk,” Janet Hanson, CEO of the women’s career networking group 85 Broads, says. Adds Judith Gerberg, a Manhattan executive coach and president of the Career Counselors Consortium, “These are people who’ve always succeeded at everything they put their mind to. And then their whole department gets laid off and they go into shock.”
I began to collect their stories, starting with the Wall Streeters whose fall from grace quickly came to define our new age of diminished expectations. A friend knew a friend who knew a young woman at Barclays or Citibank, and we’d meet after work. Typically, she’d be eager to talk about what she’d lived through but nervous about losing her job, if she still had one (which is why most opted to use pseudonyms and some workplace details have been blurred). “Wall Street is a scary little world,” Jennifer London, 25, a research analyst at a major Wall Street bank, told me over dinner in Manhattan’s Flatiron District. “If your name ever appears in print next to the firm’s name, even if you’re saying the nicest things in the world, you could be fired.”
Children of middle-class affluence, hardly trust-fund babies, women like Jennifer and Laurie saw finance as the hot ticket in a boom economy (“it became like the NBA draft,” Hanson cracks) and the entry pass to an independent life in the city. “You’re either on Wall Street and supporting yourself,” Jennifer says, “or you’re in a job you love and your parents are paying the rent.” When the crash came, simple survival at work, and being able to make monthly rent, became epic.
One thing Gen Y has in common with its older colleagues is having to deal with the downsizing fallout pretty much on its own without the outplacement help and emotional support provided by Employee Assistance Plans that even supposedly heartless Wall Street routinely offered in the 1980s and the ’90s. “In times of crisis,” Bardwick observes, “everything goes overboard.”
And 9/11 may play a role as well. In the wake of the attack, the Federal Reserve’s Alan Greenspan slashed interest rates to pump up the economy and morale, laying the groundwork for the housing bubble. But Shelley Reciniello, PhD, an organizational consultant who has worked with the major Wall Street firms since the early ’80s, believes that 9/11 was also the high water mark for companies taking responsibility for the emotional well-being of its employees. “We offered so much counseling,” she says, “the corporate powersthat- be came to resent it, unconsciously. They wanted to forget the vulnerability of that time, and the EAP budgets got trimmed.”
Those who remember feeling supported by their company in the wake of 9/11 (the bulk of Gen Y, the oldest of whom have hit their thirties—the youngest are still in high school—had not yet entered the workforce in 2001) experience the new corporate reality as a sad betrayal. Sarah Steiner, fortyish, then a legal counsel at Lehman, says the old guard that worked through the grief of 9/11 (Lehman’s offices were connected by a walkway to the World Trade Center) have had nowhere to take a different sort of pain, from diminished influence within the new Barclays regime, lost paper fortunes—the now worthless Lehman stock—and a complete lack of trust in their employer. What remains is a kind of corporate nihilism. “The guys who have been working here for 20 years while their wives were playing tennis in Connecticut, by and large, they’re not bringing these feelings back home,” she said last spring. “They’ll act out, come to work on Mondays with black eyes, from reckless skiing or even bar fights.” The women mostly vent among themselves. Both sexes have gotten sloppy, she said, in the matter of office affairs: “They used to be conducted with some discretion and now they’re completely flagrant.”
Business management experts have coined a term, “survivor’s syndrome,” to describe the Pandora’s box of bad emotions—depression, anger, guilt—that can attach to surviving employees in a downsizing office who are often as traumatized as their colleagues who actually got fired. “The research shows a spiraling sense of doom among those left behind,” says corporate coach Phillip Sandahl, cofounder of the Washington State–based Team Coaching International. In an influential book, Healing the Wounds: Overcoming the Trauma of Layoffs and Revitalizing Downsized Organizations, consultant David Noer writes about what he calls “the metaphor of the surviving children”: You’re a child in a family. You come down to the breakfast table and see that your little sister is gone and you get the message from your parents that you’re not to talk about it, otherwise tomorrow, it could be you.
“I was sitting at my computer when people on both sides of me got either the weird call or the weird e-mail, and that was it, they were gone,” 25-year-old Rebecca Westphal, an analyst at a major investment bank, says. “Security literally appeared on the floor and escorted them out. You’re supposed to go back to work after that but you can’t, you’re so stressed out. And if you talk about it in the office, you feel you’re gossiping, which you’re not supposed to do.” Having shrewdly secured delayed admission to business school, Rebecca, after surviving six waves of layoffs, finally bailed. (The “time-out” option has become so popular, biz schools are glutted with qualified applicants. I was having coffee with one Merrill pink slip–ee when she got an e-mail saying she’d landed an interview at NYU. “Very good,” she murmured. “The opportunity cost of going to business school is never going to be lower.” In civilian English: When business is tough, it’s okay for the tough to go to business school.)
“It’s like the definition of a totalitarian state,” Jennifer says, putting her Ivy League education to good use. “It’s the not knowing that creates the terror. Like the day we were told that 20 percent of the research analysts wouldn’t be here tomorrow. Would that ripple out to us? We had no idea. It’s like a war and you’re sitting in a trench, and you watch one guy in your line get hit by a bullet and go down. Your odds of surviving are actually pretty good, but it’s just so stressful. For a period of a couple months, I would go home and I couldn’t eat. I just felt numb.”
Julie Randolph, a midthirties Manhattan PR executive (which puts her on the cusp of Gens Y and X) who outearns her husband and floats the expenses of their three kids and heavily mortgaged suburban house, feels she must hang on, though lately her jobresembles something out of Ten Little Indians. “You hear there’s a list and you never knew whether you’re on it or off it. The more your colleagues tell you that you’re safe, the more you think there’s probably a big bull’s-eye on your back.”
A gallows humor comes in handy. Julie’s recollection of being told by management that her boss was set to be fired has the ring of a Mafia hit: “I couldn’t have a normal conversation with this woman because I felt dirty. I knew exactly how it was going to go down. Meanwhile, she’s got a smile on her face and she’s saying, ‘Are you ready with the presentation? Do you think this is the right font to use?’ And I felt like screaming, ‘It doesn’t matter! You’re going to be gone before the meeting ever starts!’ ”
Julie’s experience may have overshot survivor’s syndrome and landed her in Stockholm syndrome territory. “You get in this weird place where you’re appreciative of the torture,” she says. “You think about your friends who’ve been laid off with no interviews, no callbacks, and you don’t want to talk to them about all the horrendous things you’re doing at work because you think, Maybe it’s better to be doing something horrible than nothing at all.”
Those without the kids and mortgage (and a reputation among their elders for being “entitled”) can feel almost as trapped, unwilling to give up even a loathsome job for an undignified return trip home or a gig waiting tables. “We’re type A women who are used to being in control of everything,” Wendy Rosen, a 26-yearold Manhattan business consultant, says, “and right now, in this economy, we’re really not. All you hear, like a broken record, is, ‘You’re lucky you have a paycheck.’ That doesn’t make you feel better when you’re miserable at your job.” With all the extra work she and her peers have picked up from their axed colleagues, they often feel stuck in their own life plan—in Wendy’s case, without sufficient leisure to marry the fiancé she moved to the city to be with. “I don’t want to with the way things are at work,” she says. “I can’t take the time to plan a wedding and go on a honeymoon because my utilization numbers [billable hours] would go down, and I’d be passed over for a raise or let go.”
A former sorority sister from a well-to-do Southern background, Wendy is appalled at the coarseness that has crept into recessionary corporate life. She tells me about colleagues who’ve been pressured by their bosses to travel late into their pregnancies. “The senior women will say things like, ‘Well, I worked up to the day before I had my children.’ I felt like telling these women, ‘And look at you, you’re miserable!’ ” Still, she expects to find a satisfying balance between family and work even if the precise blueprint for the future hasn’t revealed itself yet. “I expect I’ll choose a career with flexible hours,” she says, “or one or two days working from home—that’s the part of me that’s Generation Y. In consulting, you hear, ‘This is something to do until you have babies.’ But I’m not going to stay home and knit sweaters. I want to use my brain.”
When Wiesenfeld compares notes with her MBA grads in the workforce, she hears two common refrains. One group, the survivors under fire, are putting off marriage and family in the style of their boomer and Gen X elders. Another group, the layoff victims, will often take the pink slip as an invitation to get pregnant and immerse themselves in family life. “They’ll tell you that they’re off the corporate track and that it’s really for the best,” she says. “Part of it is PR framing, but they really do believe it as well.”
Bardwick makes the point that recent graduates, for all their ambition, lack a feminist ideology that might check a backslide to the days when women sought the security of marriage and a hubby’s paycheck. “For the first time since labor statistics have been kept,” Bardwick says, “we see that educated professional women are beginning to leave the labor force. The absolute numbers are small, but it’s a trend.”
None of my confidantes predicts an imminent return to the ’50s, but Jennifer admits, “I do think the recession has increased the pressure to find a rich husband. Girls get really aggressive about wanting to find a guy who will take care of them. It’s not a pleasant side of the city, the dating for money.” A lack of funds can change the domestic equation even for young women who don’t fit the gold-digger description. Until last February, Jennifer’s friend Eva, 29, a Parsons grad, worked as a retail analyst at a lingerie company. When the retail market contracted, she was let go. Unable to pay the rent, she moved in with her boyfriend, with misgivings. “I’d like to be living with someone because we wanted to,”she says, “not because I had to.”
Wiesenfeld admits she’s seen these sorts of trends in previous recessions and isn’t unduly worried. However dire any individual story, she says, historically, corporate downsizing has been good for young people, creating space for them to move up the ladder if they can focus on the work, not on the
emotions spinning around the workplace. What’s new this time around is the number of women in their twenties and early thirties who are availing themselves of another option, creating their own business: “Young women are looking for meaningful lives, and they’re willing to be quite entrepreneurial to find that.”
Jennifer says, “The gleam has definitely worn off Wall Street. These companies will fire you at a moment’s notice. That’s fine. But I’m hedging my bets with something on the side, a risk, but a very calculated risk.” In other words, don’t get emotional, get even. The new project that she hopes will lead her out of the corporate cubicle? She and a friend from Harvard Business School are launching an interactive health website for young women, ChickRx, that they plan to have up and running by late fall, which connects visitors to a team of doctors on health topics such as contraception, sexual health, diet, exercise, and emotional issues. Résumé-padding college interns are doing much of the grunt labor, and costs are kept bare bones: no loans, not from parents, not from the bank. “My parents have no idea how much I’ve spent on this,” Jennifer says. “I don’t need the added pressure.”
It’s a testament to their cleverness that the business model turns on their generation’s penchant for social networking, the very trait that some experts believe will save them from the long-term unemployment that many of their older colleagues may face. “Middle-aged people are often focused internally on their families,” human resources consultant Alicia Whitaker says, “but it’s the young people who can leverage their social networking skills in a downsizing environment.” They’re hardwired, as it were, to pursue contacts, leads, job openings. “We’re the ‘do you know?’ generation,” Laurie says, “like Facebook. ‘You work at this bank; do you know my friend so-and-so?’ ”
A few months after our first meeting, I catch up with Laurie, who’s sporty in a striped nautical tee and Ray-Bans, a feckless poster child for resilience in tough times. (“I’m young and only have my drinking and my rent to support.”) She leveraged some connections and landed a new job that paid barely half what the old one did, “an administrative assistant with a brain,” but at least she didn’t have to go on unemployment or move home. “If I hadn’t found a finance job,” she says, “I would’ve joined the Peace Corps or something.” Some of her peers haven’t been as lucky, the “next-step kids,” she calls them, trolling the financial website job listings day after day, trying to move on to the next step without taking any detours. By luck or moxie, she recently found a more rigorous and well-paid finance job. (So did the Lehman friend she helped rescue on September 14.) The finance details of what Laurie actually does are beyond me. “As long as it makes sense to you,” I say. “It doesn’t really make sense to anybody,” she laughs. “Trust me, all day long, everyone thinks about what they’d be doing if they weren’t in finance.”
Laurie gets points for her droll tenacity. But if Manhattan is to reclaim its status as the ultimate laboratory for self-invention, ambitious young women need to shoot higher than just hanging on to their corporate finance seats, however lucrative. Chick- Rx offers one example; so does Sunitha Jaikumar (her real name), 26, a vivacious Southern Californian who last year was laid off at Gateway Computers. “They brought in our whole department,” she says, “and told us they were giving us two months to train our replacements or we’d lose our severance. I was like, ‘Severance—sweet!’ It’d always been a dream of mine to live in New York, and now I could afford it. I had a sixmonth budget laid out on a spreadsheet.”
Two weeks after she moved to the city, she says, the market crashed. But before her money ran out, she found a job working for a “green” cosmetics company and, even more amazing to her friends, an affordable apartment on the island, in Spanish Harlem. Of course, in this economy dreams don’t always materialize quite that easily. In the face of declining sales in a tough retail market, last April, the cosmetics company let her go. “I’m going to come out of this,” Sunitha says, “and I’m going to be okay.”
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