Burnout: can investment banks cure their addiction to overwork?

Shortly after the death of an overworked Bank of America intern in London in 2013, a then M&A analyst at a big investment bank recalls that he had an encounter on leaving his Canary Wharf tower at 11pm.

“I smell capacity,” he was told by a more senior banker — that is, free time that could be spent working.

He never reported the incident for fear of reprisals. A few years later, burnt out from bouts of working 15 hours a days and seven days a week, he quit. He brought up the incident in his exit interview as a reason he would never return.

Seven years on from the death of 21-year-old Moritz Erhardt, investment banks find themselves once again defending the hours they demand from young workers, after exhausted Goldman Sachs analysts circulated a slide deck detailing brutal 95-hour weeks and workplace abuse, exacerbated by the isolation of homeworking during the pandemic.

Their protest has captured the spirit of the moment. A string of banks have since sent memos and published press releases committing to changing the way staff work. But will it be different this time?

Senior executives clearly feel pressure to do, or at least say, something. Goldman’s chief executive, David Solomon, came out in support of the dissident analysts, and pledged more humane hours. Jane Fraser, Citigroup chief, sent staff a memo calling for a “reset” of working life, including limits on video calls and flexible working arrangements after the pandemic passes.

Other banks are giving junior staff perks and pay bumps: Jefferies offered Peloton exercise bikes; Credit Suisse is paying junior bankers $20,000 bonuses. Several banks have said they are planning to hire more staff, to lighten the load on existing employees. 

Sara Wechter, head of human resources at Citigroup, told the Financial Times that while “everything is overwhelming and hard right now,” the bank has been thinking about how to give its employees a better work-life balance since long before Fraser’s memo. She cited a company-wide day off initiated last year and to be repeated this year. “We have looked closely at hours worked, we wanted to make sure there were not pockets of people who were working too hard. It is something management is acutely sensitive to.” 

Either way, a pattern of working that was taken for granted across the industry is now the subject of widespread debate. One early career analyst at Morgan Stanley said the Goldman presentation was “all his colleagues could talk about”, debating whether they should protest too, or accept that they had signed up for a well-paying but tough job.

“On the one hand, I signed up to be an investment banking analyst, I knew I was gonna work extremely hard, I knew that people would sometimes be rude. But on the other hand we are asking ourselves whether the reality has exceeded our expectations.”

One former Goldman banking analyst, who left after two years, said opinions among his friends were split. “The senior guys’ view is, shut up or quit. For guys raising young children while managing the workload, the mentality is ‘we’ve all been there’. The flip side is, being at home on your own is not conducive to mental health. The thing that made my time at Goldman enjoyable was the camaraderie.”

Many first-year analysts have never seen their colleagues or bosses other than on screen. “Every time I leave my screen to go for a walk or take a break I need to communicate it to my VP,” said an analyst at a boutique investment bank. “Everyone is constantly scared about being monitored . . . it’s a huge breach of our privacy.” Another analyst called the technological monitoring a “virtual leash”.

It has been a particularly…