Wall Street still has lessons to learn about overworked staff

Boutique investment bank Moelis & Co has been on a roll. It is advising Saudi Aramco on its plans for a huge flotation; it helped Broadcom on its blocked bid for Qualcomm; and ranked fourth among boutique banks in the first quarter with $85m in fees, according to Thomson Reuters.

But now it is in the news for all of the wrong reasons. Last week a mid-level banker sent a 12:30am email to the boutique’s junior professionals, known as analysts, complaining he had just walked around the New York office and found only 11 of them at their desks.

“I know that you are ALL working very hard and are stretched thin across multiple projects,” he wrote. “Given that new [projects needing] staffings continue to flow in and you are all very near capacity, the only way I can think of to differentiate among you is to see who is in the office in the wee hours of the morning.”

Commenters on the website Wall Street Oasis, which first published the memo, expressed outrage. “This is why people aren’t going into banking,” wrote one. “I bet this is the same guy that tells new hires, ‘You don’t have to worry about facetime here, buddy. We have a very flat meritocracy’”, another wrote.

Moelis declined to comment on the email, but a spokeswoman said: “We put a lot of trust in our people, including our junior staff, knowing they can complete their work effectively whether or not they are directly supervised or physically sitting at their desks.”

The email seems particularly heartless given Moelis’ own tragic history. In 2015, junior banker Thomas Hughes jumped to his death from a ledge outside his apartment. According to a medical examiner’s report and emails shared by his family with The New York Times, Hughes, 29, was high on cocaine and a designer drug known as “bath salts”. He had just returned from a business trip and gone straight to the office, where he worked from roughly 6pm to 1am. After going home he continued to respond to work emails until 9:45am. At about 10am, he jumped. No one knows why he died, but his family said they believe work stress played a role.

Since the deaths of Hughes and several other young bankers at Goldman Sachs and Bank of America, many Wall Street banks have made efforts to improve the lot of their junior staff by trying to limit weekend work and de-emphasise the need to be in the office.

These “lifestyle” changes also reflect the fact that banks have to compete with Silicon Valley for top talent and are faced with growing concerns about the rate at which young women and minorities drop out of the industry.

Moelis has joined the general effort to improve the lives of its 500 bankers, particularly the 200 junior analysts. It provides docking stations for working at home and protected time off, and allows staff to work in an overseas office for up to a year. But the bank, which was founded soon after the financial crisis, is growing fast and staff are struggling to keep pace, despite a hiring spree that boosted its professional ranks by 15 per cent. Recent surveys by Wall Street Oasis rank Moelis fifth out of 137 investment banks for most hours worked, with an average of 84.3 per week.

I am no stranger to long hours — I used to sleep with a pager beside my bed so that editors could summon me to early morning homicides. But there is no evidence that sleep deprived people who live in the office do a better job. In fact, 2014 research by Alexandra Michel found that exhausted bankers often developed tics, such as nail biting or hair twirling, and described their bodies “fighting back” against overwork.

Yet rank-and-file Wall Street repeatedly fails to absorb this lesson, despite efforts to change things for the better. The Moelis email is particularly depressing because it specifically pooh-poohs the firm’s effort to empower flexible working, saying that “when you are truly jammed with no end in sight, you should stay in the office”.

brooke.masters@ft.com