Companies Begin To Freeze And Rescind MBA Internship & Job Offers

It was only a matter of time. But with global markets in flux, unemployment claims reaching record levels, and all signs pointing toward an impending recession amid the spread of coronavirus, MBA hiring could already be slowing down, according to a leaked accounting of the MBA job market obtained by Poets&Quants.

The document — dated March 26th from the Graduate Career Services office of a top U.S. business school — provides a sobering view of what is to come when MBA students end their spring terms and pour into the job market. Among hiring updates for 116 major companies, many of them mainstream recruiters of MBAs, 40 already have reported some form of freeze, cancellation, or rescinding of internship or job offers. According to the document, the info gathered is based on what employers are reporting to this school and “other top MBA programs.”

Companies from industries largely impacted by the spread of COVID-19, especially transportation, hospitality, and professional sports — have been most impacted. Delta Airlines has implemented a hiring freeze. JetBlue has also put a freeze on hiring, according to the document. Mariott, meanwhile, is rescinding internship offers. NBC Sports and at least one Major League Baseball team have put a hiring freeze or canceled internships. Ticketing companies such as Fandango and StubHub are also on the list of freezing hires or rescinding internship offers.


While many major MBA recruiters, including Google, Amazon, BCG, Deloitte, Goldman Sachs and others, have not reported any hiring impacts so far, several other major employers of MBAs have. AB InBev has reportedly put a freeze on hiring, as has Adobe, Visa and Wipro. Disney put internships and job offers on hold but have not yet canceled them. Facebook and Johnson & Johnson are also reportedly canceling interviews for summer internships. LEK Consulting is actually rescinding internship offers and may also delay the start of MBA hires who have already accepted offers.

This early wave of cancelations is a harbinger of what is to come because there already are reports from students that even MBA employers who are claiming that they are maintaining a “business as usual” approach to recruitment may be quietly slowing down hires. As an INSEAD student told us, “Bain R1 invites went out last week and it was a bloodbath–significantly lower numbers.”

Yet, only two weeks earlier, Bain was reassuring hires that they will have a job when they graduate. Bain & Co., for example, then said it had no plans to scale back offers made to more than 600 MBA-level hires worldwide. “You have to hire through the difficult times,” confirms Keith Bevans, who heads global consultant recruiting, in a Bloomberg Businessweek interview.


As of March 31st, MBA students at Cornell University’s Johnson Graduate School of Management have lost five employment commitments. “We have had very few reneges, one in the full-time class and four in the internship class in the industries that you would expect,” says Drew Pascarella, associate dean of MBA Programs at Cornell. “You are going to see softness in travel and leisure. We are underweight in those industries.

“We are a heavy finance, tech and consulting school,” he adds. “Those companies have not really shown softness, and we’ve heard from some of the investment banking firms in the last couple of weeks actually push out messages saying, ‘We’ve got you. Nothing is changing.’ That has been very reassuring to us. Considering where we are in the cycle, we are net positive. We actually had eight new summer internship offers show up this week and three new full-time offers. So we are adding more offers than those few that we have lost, but it is very early days.”

MBA students who have lost their internships are already beginning to show up on social media boards. “I had a really rough time getting interview invites in my field of interest, so this internship was my salvation for next year (and potentially beyond,” wrote one student on Reddit who was told Monday that his summer gig was canceled due to the pandemic. “I’m looking at current opportunities and it seems grimmer by the hour. There is a virtual recruiting session on Friday for top schools, and several companies that I was interested in must have pulled their internships between yesterday morning to afternoon. Searching Google and LinkedIn show a pretty meek offering.”


The student says he is debating his options, including deferring or even dropping out of the full-time MBA program and finishing his degree online. “I was doing well financially pre MBA so I could return to my field. It’s better than some of the options remaining at least to me. I had just three interviews from the 20+ companies applied for (and that’s with lots of networking, career services help, etc). Without an internship I don’t see how I can compete.”

At Stanford’s Graduate School of Business, a second-year MBA student told Poets&Quants, that only about 25% of the graduating class have jobs lined up. “A lot of people were in the final stage of closing an offer and that has been paused and they have to start all over again,” says the student who has already accepted a job offer. “Some people are really freaking out and others are saying they will just wait three months to start looking.”

As of last week, officials of at least a few schools also reported seeing little to no impact on hiring from the spread of coronavirus, even though many officials privately worried that the market could collapse (see This Year’s MBA Job Market: How Bad Will It Get?). After all, at the worst of the Great Recession, some MBA grads who headed to Wall Street not only found themselves out of their new jobs. Some even had to return the signing bonuses given to them by the investment banks and money management firms they joined. The recession-ravaged MBA Class of 2009 may offer a guide for what to expect, though it could be worse: At the top ten business schools, MBA employment rates at graduation dropped an average of 21% from 2007, according to an analysis by Poets&Quants. At the next 15 highly ranked schools, the drop was even steeper: 23%. 

The MBA students who are most at risk right now are those who have not yet accepted or landed a full-time job. While some employers will almost certainly pull back their offers—and at Stanford one student told Poets&Quants that he had already heard of classmates in that category—most employers will likely honor their commitments. Oddly, some of the big brand business schools could bear the brunt of the downturn. That’s because at such schools as Harvard and Stanford, a larger percentage of MBA students tend to look outside the mainstream for jobs—in startups, early-stage companies, private equity shops, and VC firms that do not hire many MBAs and tend to be off-cycle in their MBA hires.


Just look at last year’s employment rates at graduation for Stanford and Harvard: 67.5% and 77.3%, respectively. For the Class of 2019, one of the best MBA job markets ever, those are very low MBA job rates. They reflect self-confident graduates who have targeted employment in companies that do not bring in many interns who return to campus in September with a job offer already in hand. At HBS, only an average of 38% of the students convert their internships into full-time jobs. At many other schools, the conversion rate is well over 50%. Back in 2007, two years before the Great Recession vacuumed up lots of jobs in 2009, 93.5% of Stanford MBAs and 94.3% at Harvard had jobs at graduation.

Also vulnerable right now are internship offers to MBA students. As one veteran career management official tells Poets&Quants, “The short-term impact will be on internships,” says the source. “Internships are where companies can pull back pretty easily. It happened in ’01 and ’08 because you can always find employees to work on short-term projects. Why pay MBAs to do that?” Managing interns at a time of significant challenge is also considered a drain on resources. And students who do manage to hold on to their internships may see fewer full-time job offers come from them.

At the moment, the hiring outcome is changing rapidly from only a few days ago when some schools had not yet heard of many cutbacks. “From the information I have at this point, I have not heard anything regarding the spread of coronavirus impacting full-time or internship positions for our Georgetown McDonough business majors,” said Talia Schatz, director of the Undergraduate Career Development Center at Georgetown’s McDonough School of Business, last week. Schatz said she had seen no internship or job offer cancellations.

“Not yet,” Schatz added. “I think companies are trying to make sure their employees are safe and transitioning to teleworking and virtual offices right now. So no word yet if employers are starting to rescind offers, defer start dates, etcetera. As of now, I have not received any communication — or even fear of that happening — from any of my students.”


But schools are aware it’s a possibility and are doing what they can to stay ahead of it. According to Abby Scott, the assistant dean of Career Management at the University of California-Berkeley Haas School of Business, her office has set up a few new Slack channels to monitor the situation and keep “information flowing to and from students.”

“So far, we have been able to crowdsource and share some timely positive news about interviewing continuing virtually and job offers still coming in,” Scott says. “We know the situation is very fluid so a channel like Slack has been an effective new tool for us.”

Akin to McDonough, Scott says they continue to keep in touch with employers as everyone adjusts to remote work and are also offering virtual services to students.

See following pages for the full firm-by-firm accounting as of March 26th

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