“It’s been a real shock,” Alan Johnson, managing director of the firm, told me. “I don’t think any of us really appreciated how much the pandemic stimulus created a bubble … now the lights have come on and it’s a little ugly.”

Of course, Johnson says, these firms are still very profitable. “They went from making two tons of money, now they’re going to make one ton of money,” he tells me. “But it’s still a ton of money.”

It’s no surprise that Wall Street bonuses should wax and wane with the fate of the markets. But what’s shocking to Johnson is how fast the tables turned this year. Banks that went on hiring sprees in the boomtimes of 2021 are in a bind now, likely realizing in hindsight they overstaffed. “There will be layoffs — not massive layoffs, but I they’ll certainly be layoffs at the end of the year,” Johnson says.

Of course, no one’s celebrating the prospect of handing out pink slips or scaling back pay. But neither is anyone throwing a pity party for the well-to-do Wall Streeters who are about to get haircut.

“The problems here are of course dwarfed by the problems of people in real world,” Johnson says. “It’s bad when your bonus goes for a $1 million to $600,000, but that’s still $600,000.”

CNN / August 4, 2022