The princes of Wall Street are losing their crowns and tightening their belts.
Massive layoffs and diminished bonus checks promise to put a crimp in the high-flying styles of stock brokers, money managers, investment bankers and once-untouchable hedge-fund geniuses. Bloomberg BusinessWeek described Wall Street as being in “retrenchment mode.” Thousands of layoffs either came or are coming and bonuses — the cash that turns brokers and bankers into big spenders — will reportedly be a fraction of last year’s.
Many who have kept their jobs have seen bonuses slashed nearly in half.
“Wall Street is the only industry where a seven-figure bonus is considered morally and financially insulting,” Robert Frank, wealth correspondent for CNBC and author of “Richistan,” told The Post. “I’ve heard from people getting $3 million bonuses and they are screaming at their bosses, threatening to leave — the cuts are meaningful to them. And the bosses are responding, ‘Leave to go where?’ All firms on Wall Street are dealing with the same bleak, financial landscape.”
They’re also already taking financial cover.
“Starting four months ago, every Wall Street guy I know tightened up. The St. Bart’s vacation got cut back by a day. The Aspen trip is done with one less girlfriend in tow,” a Manhattan-based restaurateur told The Post. “Most Wall Street guys don’t want to be on Wall Street forever. They want to quasi-retire, invest in hotels and bars and restaurants, and make money by being involved in fun, social things. But you need scratch to do it. So those dreams are suddenly deferred.”
He added that there’s a trickle-down effect that doesn’t just hit high-end restaurants. “My stripper and escort friends are feeling it. The guys in New York are being less generous,” said the restaurateur. “A lot of sex workers have gone down to Florida where there is more money.”
Make no mistake: The titans of Wall Street haven’t given up luxury all together.
“Generally, Wall Street people are still buying, but they’re not spending as much,” Faisal Malik, owner of Status Auto Group in Staten Island, told The Post. “People looking for G Wagons normally go for the higher-end one” – at the moment, that would be the G63, which sells for around $250,000. “Now they might opt for a [Cadillac] Escalade. You can buy it for under 100 grand. It’s significantly different.”
Some sacrifices simply can’t be made, however. A high-end watch dealer told The Post how his industry “has taken a huge dip” as Wall Streeters are hanging on to their old watches another year. One of the most popular has been the Rolex Daytona, which can cost nearly $50,000.
“A [Wall Street] guy is not going to buy a Breitling — he’ll never show up at a meeting wearing one,” Frank said. “So he’ll just stick with what he already has.”
One source told The Post how, in flush times, his Wall Street pal normally picks up the dinner tab. But when they recently discussed meeting at Nobu, the pal texted him: “Nobu costs a lot, though. Trying to be more cost conscious… will do if you split?”
Other high-fliers have had their wings clipped, too.
“The junior managing director who just lost his job or had his bonus slashed, he’s not helicoptering to the Hamptons or flying private,” said Mike Giordano, a partner with Cirrus Aviation Services, a private jet charter company. “Now, they’re flying first class and driving to the Hamptons. They’re not renewing memberships in private jet clubs. Those run at least $15,000 in fees and around $5,000 an hour to use the plane.”
That said, Giordano noted, “The big guys are still calling me to buy jets. I have seven Gulf Streams on pre-buy.”
Boat sales, too, are on hold unless you’re “a big guy.”
“There’s a correlation between Wall Street and yacht sales,” a yacht broker based in Fort Lauderdale told The Post. “But it primarily impacts yachts that are 50-feet-long or shorter. They sell for a million bucks and go up to 7 million. People buying boats that are 60 feet and up, they are not affected. There’s more inventory [than there was last year] of 50-feet and down. People are waiting and seeing what happens.”
Day-long yacht charters have taken a hit as well: “Last year, guys would come down, spend $15,000 and charter a boat for the afternoon. This year, they’re likelier to hang out at the pool and save their $15,000. I think that is related to what is happening on Wall Street.”
It’s a matter of where they’re going, too.
Sources said that financially “strapped” Wall Streeters this winter have skipped Aspen for Park City or Vail, Colorado. While still pricy and luxurious, the latter two are less expensive than Aspen where a guest room at the St. Regis goes for around $2,500 per night.
Closer to home, Manhattan apartment sale contracts dipped 29 percent in the fourth quarter of 2022. “People [who were] thinking of moving from three-bedroom apartments to townhouses are having second thoughts,” Frank said. “They decided not to take the big swing in 2023.
“This will be a tough summer for real estate sales in the Hamptons,” he predicted.
How much worse might it all get?
“They can ride this out for a while,” predicted Frank of Wall Street’s suddenly less rich. “The problem is if this [downturn] continues into next year. Then they’re going to look at cutting out a vacation or not doing renovations on the Hamptons house. Bonuses need to come back for them to keep up their lifestyles.”