For MBA students hoping to land a summer internship or job on Wall Street this year, it’s not looking good. The financial powerhouses are cutting back on recruiting as they continue to layoff more of the people already on their payrolls.
On most business school campuses, there already had been a negative vibe on Wall Street jobs as the banks have retrenched in recent months. But a dismal story in today’s New York Times entitled “A Blow to Pinstripe Aspirations” gave more reason for concern.
‘HECK OF A LOT MORE ANXIETY’ AT HARVARD
At Harvard Business School, where a relatively high 39 percent of this year’s graduates went into finance, versus 34 percent in 2010, there has been a “heck of a lot more anxiety” about next year’s hiring season, Professor William A. Sahlman told the Times.
“People used to think of some of these organizations, like a Morgan Stanley or a Goldman Sachs, as safe career bets,” Sahlman said. “Those firms are not going away, but they’re going to hire half the people they hired before.”
As the newspaper succinctly put it: “Three years after the global financial crisis nearly brought Wall Street firms to the brink, the nation’s largest banks are again struggling. As profits wane, layoffs have claimed thousands of jobs and those still employed have watched their compensation shrink. These problems are set against the morale-crushing backdrop of the Occupy Wall Street movement, which has made a villain of a once-lionized industry.”
‘THE NEW STATUS JOBS AREN’T AT GOLDMAN SACHS. THEY’RE AT GOOGLE, APPLE AND FACEBOOK.’
The layoffs and the bad press apparently are having an impact. “It’s lost its luster,” a former Goldman analyst told the Times. The former analyst, who left the financial sector this year, said that in addition to losing some of the monetary benefits of their jobs, his friends who remained in finance were suffering from peer envy. “The new status jobs aren’t at Goldman Sachs. They’re at Google, Apple and Facebook.”
The Times found that much of the burden of Wall Street’s latest retrenchment has fallen on young financiers. The number of investment bank and brokerage firm employees between the ages 20 and 34 fell by 25 percent from the third quarter of 2008 to the same period of 2011, a loss of 110,000 jobs from layoffs, attrition and voluntary departures.
By comparison, industry headcount dropped by 17 percent in the same period, according to an analysis by The New York Times of data for New York City provided by the Bureau of Labor Statistics. The number of staff members over the age of 55 decreased by only 11 percent.
WHARTON HOPES TO PICK UP WALL STREET SLACK BY TAPPING INTO BOUTIQUE BANKS
Asked how Wharton’s career management center is reacting to cutbacks in the hiring plans of banks, Director Maryellen Lamb tried to reassure students.
“In 2008-9 when the banking world was falling apart, we were in the fortunate position of being a core school for nearly every bulge bracket bank,” she told The Wharton Journal yesterday.” While they cut back on recruiting, they were still keen to hire Wharton talent, and we’re hearing the same thing this year. One way we’ve been able to minimize some of the fallout from tight hiring markets is to grow our relationships with more of the boutique banks. We also have a great alumni network to lean on when times are tough. We encourage students who are interested in corporate finance to think beyond banks and look at some of the great finance opportunities within industry.”