Bump or Bust for MBA Jobs?

Job cuts and a looming recession threaten the hiring outlook, but the big banks and other employers don't plan to slow their recruiting

by Alison Damast

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It's turning into a nervous 2008 for soon-to-be MBAs. Many of the large financial institutions that business school students typically turn to for summer internships and job offers have posted large mortgage-related losses and announced layoffs in the past few weeks. Just last week, for instance, Bank of America (BAC) announced it would cut an additional 650 corporate and investment banking jobs, while Citigroup (C) said it planned to cut 4,200 jobs globally. Suddenly, the employment outlook is looking a bit more turbulent.

Up to now, the academic year has been good for MBA student job-seekers. Recruiters haven't stopped coming to campus to interview for summer internship jobs, career services officers said. Meanwhile, second-year students looking for full-time jobs appear to be doing as well as, if not better than, their counterparts last year, with many schools reporting increased recruiting, more job offers, and higher salaries for this year's grads. But that can all change in a hurry.

The challenging financial environment means students must be extra diligent when conducting their internship and job searches this year, said Tom Kozicki, board president of the MBA Career Services Council, the umbrella group of school career placement offices. "Those who are attacking the market aggressively, I think, will fare well whether the economy dips or not, but those who wait on the sidelines and hope for something to be delivered to them by their business school are the ones who will get caught if this market turns down," said Kozicki, who also serves as executive director of the career center at the University of California, Irvine's Paul Merage School of Business.

Changing Their Strategies

Brian Mirochnik, 26, a first-year student at the University of Rochester's Simon Graduate School of Business is heeding that advice as he conducts his search for a summer internship. He wants to pursue a career in investment banking, specializing in leveraged finance, but realizes this year he might not be able to obtain a position in that sector, which has been beleaguered by job cuts and financial losses.

He has traveled to New York several times over the past few weeks to talk with nearly 50 investment bankers about the state of the industry. The news hasn't been heartening—they have told him there are about 40% fewer jobs in his area of interest. He has since changed his strategy and is now considering taking an internship in the corporate finance division of investment banking.

"I would be lying to tell you I wasn't nervous about the prospects, because I left a good career to come back to business school to go into investment banking," said Mirochnik, who worked as a commercial banker and entrepreneur before attending Rochester. "I think across the board people are nervous, but you can't let that affect how you go about the recruiting process."

Big Banks Still Recruiting

This year's first-year MBA students have been anxious about the job market from the moment they arrived on campus, said Kenneth Keeley, executive director of the career opportunities center at Carnegie Mellon's Tepper School of Business.

But their fears have been somewhat assuaged by the large number of recruiters who have been on campus to interview students in the past few weeks, including Deutsche Bank (DB), Merrill Lynch (MER), Goldman Sachs (GS), and Bank of America, he said.