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The Fading American Dream

The Little India, News Report, Meghna Pant Posted: Jan 05, 2009

Kunal remembers the evening of March 16, 2008, when he stood frozen in front of his TV, watching the blue ticker on CNBC proclaim, "Bear Sterns collapses." His first reaction was of disbelief this cannot be happening! But, in the matter of a short weekend, Kunal, who had a coveted job as an equity derivatives trader at Bear Sterns, became yet another faceless subprime victim with an uncertain future. He walked into his office the next day and bid farewell to tearful colleagues who were carrying their belongings and aspirations out of the 383 Madison Avenue office in Manhattan. "We knew it was a day we would never forget in our whole careers," says Kunal.

Although Kunal was not among the redundant employees, he could not afford to become complacent. "From March 17 to June 2, me and a few others just sat around and waited. We didn't have any work and we didn't know what would happen to us would we be fired, would we be retained, would we still have the same role, would we still have our desks, should we look for other jobs?" he asked. 

Being prepared for such a casualty didn't help Kunal either, he recalls: "Before the news even broke, I knew there was trouble brewing. When Bear Sterns was downgraded by a credit agency, I had a feeling that we were going to go bust and some of us even spoke about it. I thought I was ready in a way. But, when it actually happened I still felt really shocked." 

After more than three months of insecurity, Kunal was finally informed that he would be absorbed in the same position with his now new employer, JP Morgan Chase. The guesswork did end, but it was only by October that Kunal was able to move back to his old desk at his former employer's building. And even now, the speculation has not ended, "We are all still scared because we know that for the next one year heads will roll and ours could be one of them."

In the past few months, Wall Street "madmen" have unleashed their "weapons of mass destruction" before a gaping world. Blue-chip banking giant Lehman Brothers went bankrupt; Bank of America acquired Merrill Lynch; the U.S. effectively nationalized the insuring giant American International Group; JP Morgan Chase acquired Bear Sterns and Washington Mutual; Goldman Sachs and Morgan Stanley became commercial banks and Wells Fargo bought out Wachovia.

Century-old firms, many of which had survived market vagaries and even the Great Depression, met their ends in this credit crisis. Suddenly there were no stand-alone investment banks left on Wall Street. On top of that the fat cats were well fed and Main Street was left to foot a $700 billion bailout bill. 

The golden era of hedge fund managers and investment bankers has come to a rude end.

But few are sympathetic. Many Indian Americans are equally disdainful of investment bankers who, they say, are crying fox at having to trade their Kiton suits for polo shirts and chinos. There is little compassion that these "moneybags" will have to give up such epicurean delights as foie gras and oxtail marmalade for the opium of the masses - dal-chawal.

 But these are unprecedented times and the tremors have expanded far beyond Wall Street to Main Street. Tens of thousands of Indians work in the financial sector and the overnight credit tsunami is rendering many of them jobless, homeless and, sometimes, penniless. 

The worse part is that large-scale layoffs are far from over. In fact, they have just begun.

The layoffs are also extending beyond the financial companies and moving across industries and verticals. Behemoths such as British Telecom, General Motors and Yahoo! have announced steep layoffs to trim costs. Says Kunal: "Look, everyone knows that Wall Street is not a walk in the park. It is a callous place. The fat is taken off on a regular basis every 5-6 years and only the best survive. But this time the layoffs have reached historic proportions. There is no longer a distinction between performers and non-performers. A new line is drawn and it's all about who is lucky and who is unlucky. It's really brutal because so much fat has been cut off that it has reached the bones, leaving everyone feeling raw and helpless." 

Employees are nervous and distrustful, waiting for the next shoe to drop. Gautam (name changed to protect identity), who works as an investment banker in New York with JP Morgan Chase, a long time banking giant, expresses this growing sense of insecurity: "Even though my company is in a good position, I can never feel safe after what happened to my friends at Lehman Brothers. I get nightmares that I too will receive a memo on any given Sunday saying my company is shutting shop. I imagine walking into my office on a Monday to clean out my desk while my parents, friends and the whole world watch. I am almost prepared that this will happen and that I will be suddenly left on the streets."

Malik Peshimam, a technical analyst with a hedge fund, Lotus Project Ventures, knows the sentiment: "My firm has not even started layoffs, yet the sentiment among colleagues is very pessimistic. We all sit in the office thinking, 'When is it going to be my turn?' Everyday when we leave work there is a feeling of relief that, 'Thank God we survived today.' You don't take certain liberties and face time has become very important; people are working harder and longer, people are taking shorter 15-minute lunch breaks, people have cancelled their holidays out of fear that they may come back to a pink slip. It's very depressing to think but most people now believe that 2009 will be worse."

Many companies are adding to the disgruntlement of employees by handling layoffs tersely and unprofessionally. Companies are too busy focusing on shareholder value to worry about employee sentiments. One company asked its heads of departments to layoff managerial executives on the phone, instead of in person, and that too while some unsuspecting souls were on out-of-town assignments with company clients. No sympathy was shown to employees with compelling personal problems, like a manager on an H1-B visa who has a stay-at-home pregnant wife. 

Since some companies did not even issue a cursory warning or offer a grace period, many people have been caught off-guard, especially those who, ironically enough, were recently promoted.

Blogs are buzzing with heart wrenching experiences of those callously laid off. 

This perpetual state of flux is hard, especially for Indians, who come from a highly ritualized culture that values security. A layoff is often not viewed as a recessionary byproduct, but a personal failure and a social stigma. This is particularly true for Indian Americans, many of whom who pride themselves on having made it in a foreign land and are often viewed as the "big guys" in their family and social circles.

In October, two unemployed Indian Americans Kartik Rajaram and Lakshminivasa Rao Nerusu, killed their entire families. Indian media have likewise reported several suicides tied to massive losses in the stock market, such as that of 34-year-old stock investor in Mumbai, Parag Tanna and 24-year-old stock broker Amir Ali Virani in Hyderabad. Very few recently laid off Indians were prepared to be identified in this article, either out of shame or out of fear that public exposure might undermine their rehiring potential.

Without a doubt, the American Dream has soured for tens of thousands of Indian Americans. High rolling Indian-American investment bankers are dazed by the ghostly visions of Wall Street and a country that has fallen from its ivory tower. The problem is even more acute for H1B professionals, who not only lose their paychecks, but are confronted with the prospect of having to return within weeks. 

Shalini (name altered), who came to New York City from Mumbai one year ago to work with Ernst & Young, is coping with just such an eventuality. Within a few months she was promoted from assistant manager to manager in her division. However, in November, the company let her go. Her first thought was, "How am I going to find another job in the next six weeks in this kind of environment?" 

Shalini is on an H1-B work permit, which means that if she doesn't find work within 30 to 60 days, she has to leave the country. Her prospects are bleak. Most companies in the U.S., India and across the world have either frozen hiring or are sacking their workforce. Shalini has realized that there is no safety net in the U.S. without a Green Card or citizenship. So she is following the example of several NRIs, who have applied to non-U.S. companies, sent resumes to contacts in corporate India, put up notices to sell their homes and furniture, and postponed plans to get married or start a family.

Some are turning to desperate measures, if online forums and blogs are any guide. In one blog, Murthyforum, a man muses that this may be a good time to marry his fianc who has an American passport because he thinks he is going to get laid-off and wants to continue living in the U.S. 

Even those who have managed to retain their jobs on Wall Street are feeling the heat. The Los Angeles Times, reported on an Indian couple, Amardeep and Mona Mond, who have been forced to seriously downsize their lifestyle, as Amardeep Mond, who worked for Lehman Brothers, faces the prospect of losing his bonus and options. The couple moved the family from a three-bedroom house to a two-bedroom apartment in Edison, N.J., where their main concern revolves around funding their daughter's education. 

Rohit Turkhud, immigration attorney with Nallaseth & Turkhud, senses a growing sense of insecurity among his clients: "This is the worst immigration situation I have seen in my twenty-four years of experience. It wasn't this bad even post 9/11. In the last four weeks I have been seeing an increase in consultations with people who got laid-off on Wall Street. Most Indians have lost their immigration status and only very few lucky ones have been able to keep their status and continue staying in America. No one knows where to turn or where to go since immigration laws are so tough. Even applications for fresh non-immigration visas are going down and we expect that in the year 2009 new H1B visa applications may actually decline as compared to this year."

A few are finding a rare silver lining in the current economic crisis. "We see the upheaval in America as a blessing in disguise," says Zulfikar Malik who recently moved to Antwerp, Belgium, with his wife Fatema, to work with Nike as a project leader at the European Logistics Centre for EMEA. The couple had been working in New Jersey for the past five years when Malik got an offer in Europe: "For years we had been talking about living in Europe and experiencing a new culture. But we were so settled in our life in America that we didn't do anything about it. It was only when we started hearing about our friends losing jobs that we realized that this could also happen to us. So we decided that it is time to throw caution to the winds and do what we had always wanted. Since nothing is for certain anymore, there is no point in being attached to a false sense of security. We are still young and this is our chance to get away and explore a different world."

Sumeet Behl, likewise, decided to turn his misfortune into an opportunity. Behl was laid off by big accounting firm in New York, where he was a senior associate. But within three weeks he had five new job offers and was promoted to manager at a new firm. "Getting laid-off was the best thing that ever happened to me," Behl says. "I was stuck in a rut but I didn't make a change because I got too used to a regular paycheck. Only when that security was thrown out did I realize my true worth. The offers came pouring in, so I decided to stop being scared to ask for things and took my life in my own hands. I negotiated my pay so now I earn 25 percent more and I have fewer working hours. I also got a neat severance package, so instead of going back to work immediately, I took some much-needed time off and did the things that I always wanted to, like hanging out at the golf course all Monday and traveling across Hawaii." 

But both Behl and Malik are quite the exceptions. For the vast majority of Indians working in the American financial sector, the realization is dawning that the U.S. is no longer the world's epicenter for career and professional advancement as their American dreams come crashing down.

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