Gleacher terminated its intern class a mere two business days before the starry-eyed novices were set to start work, Business Insider has learned.
Harsh, but perhaps not surprising. Times have been tough for Gleacher & Co. as of late.
Today the firm hired a chief restructuring officer and closed its investment-banking business.
Earlier this year the small investment bank laid off about 160 employees when it shuttered its underperforming fixed-income unit. It's a sector that's hurting at all Wall Street banks, especially smaller sized firms like Gleacher, where losses since 2009 total almost $200 million.
Then of course there’s the firm’s namesake, Eric Gleacher, who quit as chairman in Jan uary amid a compensation controversy with the board.
At some point, all of that trickles down to the little guy.
According to one would-be intern, an analyst from Gleacher delivered the bad news on Thursday morning.
“This was like three days before the internship, you’ve got to be s----ing me,” the source said.
“That tells you the severity of the situation. They can’t spend the extra $100,000 for six interns for 10 weeks?” the intern said. “Something must be going on that’s really bad.”
Last week, Gleacher announced a reverse stock split of its shares at a ratio of 1-for-20.
At its May 23 annual meeting, shareholders were set to discuss a spate of least-bad options: liquidate the company, try to find a buyer, or find ways to re-invest cash reserves. A day later Gleacher fired its CEO and COO after the firm’s biggest shareholder, MatlinPatterson Global Advisors, took control of the board.
The source said he took it as a warning sign when a fellow intern heard nothing but radio silence from Gleacher weeks before the start date.
The source’s contacts on The Street also cautioned about the potential danger of taking an internship at the firm, warning, “I’m getting a lot of resumes from Gleacher. Make sure you’re covered.”
But Gleacher assured the intern that despite its fixed-income shut down, other businesses within the firm were safe. That is, until today.
The spurned intern blamed the firm’s woes on that failed fixed-income gambit, once Gleacher’s biggest business.
“Goldman’s fixed-income kills it. Gleacher’s doesn’t. That was a very big distraction for the business,” the source said.
Though the firm wasn’t contractually obligated to pay the interns, the source said he was provided some consolation money for the whole mishap. So there’s that.
Gleacher did not respond for comment.
More From Business Insider