WSJ What’s News - Inside Wall Street’s Recruitment Wars

Episode Date: July 10, 2025

P.M. Edition for July 10. Private-equity firms are using increasingly aggressive recruitment tactics to hire recent college graduates working at big banks. WSJ reporter AnnaMaria Andriotis discusses why the recruits are being wooed away and what banks are doing about it. Plus, investors are down on Google parent Alphabet as it faces threats to its business. Heard on the Street writer Asa Fitch walks us through those challenges and what they mean for the company’s future prospects. And a federal judge issues a new block on the Trump administration’s birthright-citizenship order. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Everyone who loves to drive has a name for their car or truck. Betty Midnight. Big yellow. Your pride and joy deserves a name you can trust. Pennzoil. You know the name Pennzoil means heritage, passion, and performance. And you know Pennzoil Platinum Full Synthetic Motor Oil maximizes engine protection. Find it at Canadian Tire.

Because Betty deserves the best. Pennzoil. Long may we drive. Why big banks and private equity firms are fighting for new college grads? There is this annoyance that has been there for many years and grown as the P.E. recruiting tactics have gotten more aggressive of why are we even bothering investing in all these people? Plus, antitrust battles, AI chatbot searches, are Google's challenges an existential threat to its business? And a federal judge has blocked the Trump administration's birthright citizenship order. It's Thursday, July 10th.

I'm Alex Osole for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. Interviews until 3 a.m. Job offers that require a response within a day. All for positions that don't start for two or three years. These are some of the aggressive recruiting tactics that private equity firms are using to hire recent college graduates and poach them away from big banks, where they've

started their first gigs as analysts. Journal reporter Anna Maria Andriotis is here now to discuss. Anna Maria, why are private equity firms looking to hire from these banks? Why are they not trying to hire these recruits right out of college? Well, a college graduate is going to need a lot of work, a lot of training before they're really primed and ready to go for the type of work that private equity firms want and quite frankly that investment banks want. The investment banks have essentially been putting in a lot of their own money into training

these college graduates, but those employees end up leaving soon after all that investment has actually occurred on behalf of the investment banks to go to the private equity firms. So there is this annoyance that has been there for many years and grown as the P.E. recruiting tactics have gotten more aggressive of why are we even bothering investing in all these people? So, these banks that are, as you say, making all this investment in their new hires, how are they retaining these folks? Is it more carrot or stick? Okay, so this debate has been going on within investment banks for many years now. Why are

we investing? We're the ones incurring the expenses to train these individuals only for them to leave. What can we do to try to stem the flow? So various efforts have been tried. Morgan Stanley recently implemented a formal policy that's requiring analysts to pretty much immediately disclose to the bank if they have secured future employment elsewhere.

Goldman recently decided to ask analysts every three months if they have accepted a future job at another firm. And certainly the most vocal about this issue has been JP Morgan, which in its memo this year to incoming hires basically said analysts would be fired if they accepted future data job offers within their first 18 months. But there's something more important playing out beyond stemming the flow. There are employees at banks working on confidential deals, M&A, IPOs, etc. And a lot of times the private equity firms they're going to go to are sitting on the other side

of the deal. So the bankers who I spoke with and my colleagues spoke with were saying, well, there's a conflict of interest problem here. That was WSJ Reporter Anna Maria Andriotis. Thank you, Anna Maria. Thank you. The Pentagon is making a big investment in rare-earth magnets, striking an unusual deal with the private sector company aimed at undercutting China's dominance. MP Materials, America's largest rare-earth miner, said today that it has reached a deal under which the Defense Department will take a 15% stake in the company.

The deal calls for MP Materials to build a new factory to make rare-earth magnets at a scale that vastly exceeds current U.S. magnet production by 2028. Rare-earth magnets, which are needed in industrial products such as automobiles, wind turbines, jet fighters, and missile systems, have been at the center of the U.S.-China trade war this year. Delta Airlines shares are up today after the company forecast a stronger third quarter than analysts expected.

For more, I'm joined now by Allison Seider, who covers airlines for the journal. Allison, in April, Delta ditched its full-year financial guidance amid uncertainty. Now the company is projecting a strong third quarter. So what's changed here? The biggest thing Delta said has changed is just more clarity. When Delta pulled back its guidance in April, tariffs had just been announced. There was so much uncertainty. Consumers were pretty freaked out. What Delta executives are saying now is that it just seems like things have settled down. People are regaining some confidence, the confidence

they need to make longer term plans like booking a trip. Yeah, I'm wondering about this confidence aspect because has that returned for all levels of consumers, this premium shopper level versus like the more price sensitive consumer? What airlines, including Delta, have seen really for the last several months is that there is this gap that has emerged between the more affluent consumer, someone who's more likely to book a business class ticket or first class ticket, and a more price-sensitive consumer who might be sitting in coach at the back of the plane. People who maybe have a little bit more of a cushion aren't so affected by day-to-day fluctuations in prices.

Those people are still spending and that's been going strong. Even despite all this turmoil in the economy and all these questions in the economy, that spending has continued pretty unabated. But the revenue from main cabin was actually down about 5% in the second quarter. So what's the overall outlook for Delta? Investors are relieved that there's like a big source of uncertainty that's been removed, but it's still not going to be a great year for Delta. Their guidance is predicting pretty flat revenue,

like basically no growth, and that's really not the year they were expecting to have. That was WSJ Reporter Alison Seider. Major U.S. indexes edged higher today as investors mostly shrugged off President Trump's latest tariff broadside threatening Brazil with a 50% duty. The S&P 500 added about 0.3%, and the Nasdaq rose roughly 0.1%, with both indexes closing

at record highs. The Dow rose about 0.4%. Meanwhile, new data from the Labor Department out today showed that the number of Americans who newly filed for unemployment benefits declined last week. But the report suggested that the size of the unemployed population continued to grow in June, a sign that relatively slow hiring is making it harder for people out of work to find new jobs. Economists have been tracking the weekly figures for any signs that the labor market is gradually

weakening. So far this year, the claims data have reflected softer hiring, but no serious surge in layoffs. Coming up, do the challenges facing Google's business threaten its dominance in tech? More on what those headwinds mean for the company's future after the break. There's regular cold. And then there's the mountains are blue cold. Mountain cold refreshment. Coors light. The chill choice.

Celebrate responsibly. Must be legal drinking age. Investors aren't feeling so keen on Google at the moment. Stock of its parent alphabet is down 8% so far this year. But do the troubles driving alphabet stock price down present an existential threat? Heard on the street writer Asa Fitch is here to tell us more. Asa, I want to walk through some of these challenges that are confronting the company. Let's start with antitrust issues.

So Google is in the middle of a big antitrust battle that spans the globe. In the US, they've lost a couple of cases. And these federal judges are going to hand down some sort of remedy at some point. They have other antitrust issues in Europe. So people are very worried that various authorities are gonna force Google to break up its business.

The big one is the Chrome browser. There's an idea that the DOJ and the US Department of Justice has proposed that Google be forced to sell its Chrome browser. That seems like a pretty big challenge for the company, but is it going to be insurmountable for it to overcome? There's a big question hanging over the company. But if you really look under the hood on this, the more likely scenario is that Google doesn't face the worst case scenarios that a lot of people fear it will. If you look at the Chrome situation,

the DOJ is proposing this remedy, but it's much more likely that that's just a bargaining tactic in a way to make the other remedies that Google's gonna face look more palatable. So it's very likely that Google is going to be forced to stop making payments, for example, to Apple for its exclusive placement in the Safari browser. But the more sort of radical remedies

like the for sale of Chrome seems pretty unlikely actually. Moving on to our next challenge, AI search. Google has been spending some time trying to catch up to some of its competitors. Is this going to take away from its Google search? There's been a lot of fear about that. People are just basically talking to chat GPT instead of doing Google searches. But if you really look at some of the usage figures, Google's Gemini AI tools are used by about 350 million people every month.

That's not as good as ChatGPT, which has an estimated 600 million or so monthly users. But it's significant. Clearly, there are questions around it. But Google isn't just going to go away. They have competitive products out there in the market that many people are using. And so in many respects, the fear around that is a little bit overblown.

Let's talk now about its RoboTaxi division. Yeah, one of Google's sort of moonshot things is this RoboTaxi service called Waymo. People who live in some cities may know about it because they have those taxis. That is the best RoboTaxi business out there. And Google and its Waymo subsidiary is dominating it. Elon Musk wants to take over the robotaxi world. But the fact is, Waymo is much further ahead. So that's another area where Google is leading the way, but isn't getting a lot of credit for investors

in doing so. That was WSJ herd on the Street Rider, Asa Fitch. Thanks Asa. Thank you. A federal judge has blocked the Trump administration from enforcing its birthright citizenship order weeks after the Supreme Court limited sweeping injunctions in similar challenges. A district judge in New Hampshire said his order blocking enforcement of the policy would apply to children born to some immigrants in the U.S. since February 20th who would

be subject to President Trump's policy. The case was filed the same day as the Supreme Court's order using a different legal avenue to halt the policy. A White House spokesman said the decision is an obvious and unlawful attempt to circumvent the Supreme Court's order. The judge paused his injunction from going into effect for seven days to give the government time to appeal. And finally, for most people, an Hermes Birkin bag is a status symbol worthy of a years-long

waiting list and several thousand dollars. But the ultimate Birkin, that is Jane Birkin's original prototype, is worth millions. It sold today at an auction at Sotheby's Paris for 8.6 million euros, or about 10.1 million dollars, setting a new record for a handbag sold at auction. The client's enthusiasm surrounding this auction pushed Sotheby's to upgrade the planned online-only sale into a live auction in its Paris galleries.

After a 10-minute bidding war, the bag was sold to a private collector from Japan. Despite that hefty price tag, actress and singer Jane Birkin, for whom the bag was named, didn't let it sit pristinely on a shelf. It was her everyday bag, and she adorned it with stickers, charms, and beads. One of the most personal details on the bag sold today are her nail clippers hanging on the shoulder strap. And that's what's news for this Thursday afternoon. Today's show was produced by Pierre Bienneme

with supervising producer Michael Kosmides. And with a much less expensive bag, I'm Alex Osola for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.