Storm Clouds on the Job Hunt Horizon

While most recruiters are still seeking MBAs despite a shaky economy, many B-school students are hedging their bets and accepting early offers

by Alison Damast

The classrooms at Carnegie Mellon's Tepper School of Business New York branch were bustling last week, filled with nearly a dozen recruiters pursuing their annual hunt for second-year MBA students. Students dressed in suits nervously filed in and out of the rooms, clutching their résumés and interview schedules as they met with representatives from Bear Stearns (BSC), Bank of America (BAC), and Citigroup (C), among others.

The scene was no different from other recruiting events of recent years, but students admitted to feeling on edge. Some said that the recent news of layoffs at major banks—due to fallout from the mortgage lending crisis and the growing fear of a recession (BusinessWeek, 9/18/07)—was already having an impact on their job search. A handful of firms, including Morgan Stanley (MS) and Deutsche Bank (DB), had recently canceled second-year recruiting events at Carnegie Mellon's Pittsburgh campus, heightening students' anxiety.

"I definitely feel that the job opportunities are a little bit less now than last year," said Danny Fang, a second-year, dual-degree MBA student who had come to New York to interview for trading positions at banks. "A lot of the students, the ones still looking for jobs, are pretty anxious."

Rocky Recruiting Season

On the surface, the fall recruiting season appears on par with last year at most MBA programs. But recruiters and students said they are aware that, given the shaky state of the economy, it could change at any moment. They are waiting to see if the recent fallout from the subprime mortgage crisis will trickle down to MBA campuses and ultimately have an impact on students' chances at obtaining full-time job and internship offers.

"I think we have to be sensitive to it and recognize that there are warnings on the horizon," said Edmund Hughes, director of career management at Tulane University's Freeman School of Business, a school that places many of its students in financial trading jobs in New York and Houston.

There is already some early indication that some sectors will be affected in coming months. Recruiters in areas including real estate and structured finance have hinted they might be cutting back the number of offers they make to full-time students this year, career services directors said.

Affected Sectors

For example, at University of North Carolina at Chapel Hill's Kenan-Flagler Business School—which has a concentration in real estate—recruiters from residential development firms like Centex (CTX), Pulte Homes (PHM), and Toll Brothers (TOL) have chosen not to come to campus this fall. In the past, these firms hired a number of Kenan-Flagler students for internships and full-time jobs, said Mindy Storrie, UNC's interim director of the career management center. Most have likely backed off of hiring this year because of the downturn in the housing market, though commercial firms are still recruiting, she said.

"Some [residential firms] have decided to hire in smaller numbers and some have declined to come in to interview students," Storrie said.