The Bear Meltdown Rattles B-Students

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Mark Zupan, dean of University of Rochester's Simon School of Business, said placement is slightly up at his school, but starting salaries are down by a "couple of thousand" dollars this year. "It's starting to be more of a buyer's market," he said. "Most [financial institutions] are scaling back."

Indeed, recruiters from major companies said they are cutting back on the number of offers made to students in nearly all divisions. Caitlin McLaughlin, global head of campus recruiting for Citigroup Markets & Banking (C), said her firm is still recruiting heavily on business school campuses, but they are not extending as many offers to students as last year. "I think it is a tightening of the belt. We are slightly down by about 10% overall, but the reality is that it is not in one area. We have 18 different undergraduate programs and eight or nine MBA programs, and there's been a reduction of one or two per business," she said.

Jobs in Jeopardy

This type of approach is preferable in the long run. When companies give out too many offers in economic downturns, they might later be forced to rescind them, and students tend to suffer, said Roxanne Hori, assistant dean and director of career management at Northwestern University's Kellogg Graduate School of Management. "Many of the financial-service companies are being more conservative with their numbers this year. This may not be great for students in the short term in terms of the number of opportunities, but it will play out better for them in the long haul," she said. "Hopefully, we won't see delayed start dates or offers being pulled like we did five or six years ago," she said, referring to the last time a recession hurt the business school job market.

That's not to say some students aren't already feeling the effects of the downturn, especially those who had summer internships or jobs lined up at Bear Stearns. Wendy Tsung, associate dean and executive director of the MBA Career Management Center at Emory University's Goizueta Business School, has been trying to help two second-year MBA students who accepted full-time jobs with Bear Stearns get clarification on whether the positions still exist. The students first learned their jobs might be in jeopardy on Mar. 17 and have spent the past few days trying to reach recruiters. They have had trouble getting any definitive information, Tsung said. The students themselves couldn't be reached for comment.

"The recruiters are trying to reach out to the schools, but I guess there is still not enough clarity as to how the deal might go through and which groups are staying and which groups are going," said Tsung, who spoke to a Bear recruiter earlier this week.

Anxious Week

Amber Salley, a second-year student at University of Chicago's Graduate School of Business, had an internship in Bear's investment banking division last summer and was offered a full-time job this year. She declined, instead choosing to take a consulting job with Booz Allen Hamilton in Chicago. Salley said several people she worked with last summer accepted offers to go back to Bear Stearns. "No one I know has talked to anyone, but not for lack of trying," she said.

The travails of Bear Stearns have had a sobering effect on business school students throughout the country, especially those who look for jobs in the financial-services industry, said Tracy Handler, director of the Graduate Career Management Center at Baruch College's Zicklin School of Business in New York City. "I think what happened…with Bear shook up a lot of people," said Handler, also a board member of the MBA Career Services Council. "I saw a couple of people yesterday who said, 'I'm coming to see you tomorrow because I'm worried about the market.' It is just an anxious week."

Meanwhile, students who have offers for summer internships and full-time jobs are not being quite as picky as they might have been last year, when job offers were more plentiful, said Kellogg's Hori. "We've seen somewhat with banking where people just decided, 'I have an offer, it's a great offer, and I'm just going to take it because it just seems like it is better than waiting around to see if something better comes along,'" she said.

Damast is a reporter for BusinessWeek.com.