Bear Stearns calls in grief counselors

March 19, 2008 8:58:08 AM PDT
Facing the loss of their life savings and very possibly their jobs, employees at investment bank Bear Stearns are turning to trained professionals -- not for financial advice but for psychological counseling. The company, which collapsed suddenly last week when real estate clients withdrew $17 billion in two days, will provide psychological counselors, called employee assistance professionals, to help workers handle the news that their plans and perhaps their dreams have abruptly and dramatically changed.

"Employee assistance professionals are behavioral experts in the workplace. Anything that effects human behavior or emotions at work are the areas where we focus. We're not looking at the financial realities of a situation, but the emotional impact of that situation," said John Maynard, CEO of the Employee Assistance Professionals Association, the largest such organization in the country with 4,000 members.

Spokespeople for the bank would not comment on how many counselors would be hired to meet with the company's 14,000 employees, but said both internal and outside help would be used.

Many of the company's employees could lose their jobs and all of them have seen the value of their stock holdings and options evaporate overnight.

Savings Decimated An average Bear Stearns employee who had $200,000 in a retirement fund last week now has just $2,000.

Employee assistance professionals, who compare their work to grief counseling, told ABC News that the sudden shock of learning that you have lost your life savings or job is akin to the emotional jolt felt when learning you have a terminal disease.

Symptoms of dealing with the trauma can include anxiety, depression, irritability, withdrawal, loss of appetite and sleeplessness.

"I have participated in mergers in [the] past and I've witnessed a reaction very similar to that found in people grieving the loss of a loved one," said Dan Hughes, a psychologist and director of the employee assistance program at Mount Sinai Medical Center in New York City.

"People move though a series of emotions much like in the grieving process. They go from shock, 'how can this be happening,' to anger, 'after all my work at the company, you're doing this.' From a counseling perspective, we have to keep people mobilized and action oriented," he said.

Fearing a cash shortage, real estate clients caused essentially a run on the bank last week. Facing the prospect of bankruptcy, Bear CEO Alan Schwartz sold the company to JPMorgan Chase for $240 million, a song compared with its value of $20 billion just three months ago.

Overnight, the stock tumbled and was valued at $2 a piece Monday, the value of JPMorgan's offer, though it has since moved a bit higher.

About 30 percent of the company, from secretaries to executives, are long-term owners of the shares, leaving people who had recently bought homes or who were looking forward to retirement to radically change their plans.

'On the Hook' "These were secretaries. They don't even live in Manhattan. They [are] commuting from New Jersey and Long Island and leading relatively modest lives and suddenly they've had major nest eggs wiped out," James Stewart, editor at large at Smart Money, told ABC News.

It is the support staff, at the bottom of the pecking order, who will most be affected not only financially but also psychologically, employee assistance professionals said.

"There are young people just out of college or business school who just signed leases in Manhattan and now they're on the hook for that. Someone else maybe refinanced his home, or is paying for his kid to go to college. Even if they receive severance, this is going to be extremely disruptive. Each person is going to experience this differently," said Hughes. "It's the assistants, secretaries and blue-collar guys who keep the building running that are the most vulnerable."

Typically, psychologists or social workers trained as employee assistance professionals are called by companies soon after workers have been given the bad news.

"Hearing that you've lost everything and may be out of a job on the news would be a blow to anybody," said Maynard.

"In a case like this, counselors are mobilized to go on site and be available in a particular place and at a particular time. Depending on the company, they may start out in groups. The initial conversation with employees is educational. Counselors will let them know what a normal reaction to this sort of news looks like," said Maynard.

"People could be feeling extreme helplessness or hopelessness. It is not just the employee who might be worried or irritable, but his spouse or family as well," Maynard said.