Posted by: Louis Lavelle on February 7, 2012
For a certain type of MBA, but certainly not all, the degree is all about landing a job on Wall Street. And not just any job, an investment banking job, the kind that promises untold riches—a lifetime of high six-figure salaries and bonuses to match.
But that kind of job is rapidly disappearing. UBS, Deutsche Bank, Barclays, Morgan Stanley, Citigroup and Credit Suisse have all announced massive pay cuts for investment bankers in recent weeks, and many of the same institutions have also reported job cuts. In fact the global financial services industry is hemorrhaging jobs of all sorts, not just investment banking, with the total now somewhere north of 200,000 in the latest purge. For a withering view of life among the Masters of the Universe these days—and a good explanation for why lower pay may be a semi-permanent condition—check out this week’s New York magazine cover story, “The Emasculation of Wall Street.” If you’re contemplating a banking career, or already have one, it will give you second thoughts.
These banks are big employers of MBAs, or at least they were. At Chicago’s Booth School of Business and Wharton, big banks hired nearly 70 full-time MBAs at graduation; at Columbia, in Wall Street’s backyard, the number approached 100.
Booth, Virginia's Darden School of Business, and Duke's Fuqua School of Business are already reporting a decline in investment banking recruiting activity such as campus visits by recruiters and scheduled job interviews during the 2012 recruiting season, which began in the fall.
The assumption, I think, is that the cutbacks are supply driven--the supply of investment banking jobs is drying up, so recruiting has taken a hit. But I'm beginning to wonder if it might be demand driven--if the number of students who view investment banking as a viable career choice is beginning to slip as the industry enters a period of turmoil that makes those jobs seems less certain, and far less lucrative than they once were.
Are there any would-be investment bankers out there who have given up on the idea of a Wall Street job in favor of something a little more ordinary?