If the slide deck that 13 Goldman Sachs junior bankers presented to their supervisors in 2021 — detailing “inhumane” 100-hour workweeks, deteriorating physical and mental health and a souring outlook for the future — was the watershed moment that spurred an “employee’s market” in banking, a Bloomberg report Wednesday concerning boutique bank Perella Weinberg may prove the counterbalance.

The investment bank is cutting about 7% of its workforce to free up funds to hire top talent, an unnamed source told the wire service.

Job cuts are not the issue — they’re rather de rigeur, at this point. Goldman Sachs, Morgan Stanley, BNY Mellon and Capital One have all announced headcount reductions of more than 1,000 within the past six months. News of widespread cuts at Bank of America and Citi surfaced after the fact.

Attention should be paid, rather, to the reallocation-of-funds part. Translation: “It’s not that we want fewer bankers, we want better bankers.”

Perella Weinberg spokespeople declined to comment to Bloomberg or to eFinancial Careers. But a look at the online forum Wall Street Oasis appears to confirm the downturn.

Several factors may make this potential development less alarming. First, it’s from unnamed sources. 

Second: timing. It’s turnover season, and Perella may want more carrots to dangle.

“This is the period, in the first few months of the second quarter, when people have been paid their bonuses — there’s a little bit of musical chairs,” Barclays CEO C.S. Venkatakrishnan told Bloomberg this week. “It’s a time-honored tradition.” 

Still, if you’re an intern and it’s (at best) your third week, and you hear that rumor around the office, you realize your chances of staying are not good. In an employee’s market, you could argue you’re a bargain, you’re cheaper talent than that other guy, you’ll work hard. But in an employer’s market, it isn’t about work. That’s relatively scarce. Banks in an employer’s market aren’t looking for workhorses; they want show ponies. 

That’s a far cry from January 2022, when Citi CFO Mark Mason said his bank had “seen some pressure in what one has to pay to attract talent.” 

“You’ve even seen it at some of the … entry levels in the organization,” he said at the time.

Citi, between June 2021 and January 2022, bumped up its base salary for first-year analysts twice — first from $85,000 to $100,000 per year, then to $110,000.

Banks now are sweating less what they’ll pay first-years and more how they’ll lure 20-year veterans.

A third factor for Perella may be size and niche. 

Jamie Dimon, in January 2022, said if paying talent more “squeezes margins a little bit for shareholders, so be it.”

But the CEO of JPMorgan can afford — literally, given that bank’s balance sheet — to say that. Perella Weinberg is a boutique bank, so it might be given some liberty to be choosy with its talent.

Dimon, for his part, added that “CEOs shouldn’t be crybabies about it. They should just deal with it.” 

“The job is to serve your client as best you can with all the factors out there,” he said.

In leaning toward attracting experience, Perella may be looking to stay true to that last part.

But it’s not the only boutique trimming headcount. Lazard announced in April it aims to cut 10% of its staff this year — partially because dealmaking across the banking sector has slumped 44% so far in 2023.

“Candidly, things have really deteriorated, I think, overall in the external environment relative to where we were in December and again in February,” Lazard CEO Ken Jacobs said in what tuned out to be his last quarterly earnings call before the bank announced he would step down.

Lazard also cited the cost of keeping the talent it added in the immediate post-COVID era. 

“We’ve seen big increases across the industry in salary. That means benefits are going up,” Jacobs said, according to the Financial Times. “That’s very sticky. It’s very hard to get that out of the system.”

Perella and Lazard, then, may be on opposite courses — the latter trying to keep talent it already acquired, and the former playing spoiler.

The cuts at Perella would affect fewer than 50 employees across all levels in banking and corporate functions, according to Bloomberg’s source. 

But the strategy, if accurately represented, marks a seismic shift for working bankers.