Wall Street’s collapse leads to Great Depression for MBAs
Before arriving at Carnegie Mellon University to attend business school this fall, Robert Leming psyched himself up for a punishing first year by watching “Wall Street,” “Boiler Room” and “The Secret of My Success”—films that glamorize financial power brokers and their free-spending lifestyle. Leming hoped that after graduation the doors to that world would swing open for him.
Months later, Leming, 25, and his classmates have learned that there is a gulf between the fictions peddled in Hollywood films and the current economic reality. Dreams of joining an investment bank, it appears, will have to be put on ice.
“Last summer when I told people I was going to graduate school for business, they thought I’d go out in the world, find a great job, and be successful,” said Leming, who grew up in New Jersey. “Now they only express concern. It’s 180 degrees different.”
Though Americans are applying to business school in record numbers, seeking refuge from the cratering job market in graduate study, the mood at the schools themselves is somber. MBA candidates are realizing that the sputtering economy is an unanticipated roadblock on the way to becoming “Masters of the Universe.”
Students who entered school hoping to land high-paying jobs on Wall Street are struggling to figure out what to do instead. To be sure, some are still trying to find a way into investment banking, but many are quickly switching gears to other careers.
It’s been a roller coaster ride for students, one that has brought diminished expectations and the realization that they are no longer hot commodities.
“We’re asking students to be flexible,” said Kip Harrell, associate vice president for professional development and career management at Thunderbird School of Global Management, a graduate business school in Arizona. A job “might not be your A1 priority pick. It might be your B or C choice, but before turning something down, realize that jobs are fewer and farther between.”
Leming is now looking at a career in government, where he’s thinks he’s more likely to land a job. He has a summer internship lined up with the U.S. Department of Energy that he hopes will lead to a permanent position.
For others, the shift is harder to accept.
Stefan Martinovic, 23, is graduating this May from the Mason School of Business at the College of William & Mary. For much of his life, he’s wanted to go into finance. Martinovic has followed the markets since he was a child and dreamed of becoming CEO of JPMorgan Chase. Growing up just outside New York City, he was surrounded by bankers and brokers. It seemed like an exciting career—one that brought with it the possibility of wealth and influence.
Until recently, it looked like Martinovic would attain his dream. Early last year, he was being scouted for an internship at Bear Stearns. But after a successful interview, Martinovic received a surprising phone call from the company saying they couldn’t fund the position. A day later, Bear Stearns collapsed.
It got worse. Last semester, he attended a career fair the very same week that the federal government announced a $700 billion bailout of the financial industry. He arrived with 30 copies of his résumé, but soon realized he could chuck a third of them because so many firms didn’t show up.
Now that he’s only months from graduation, Martinovic is feeling downbeat. He’s still sending out résumés, but might ditch the job search to get a master’s in public policy. Since banks might be nationalized, he reasons, it makes sense to have a firm grounding in government. At the very least, it would mean he’d have something to do next year.
“I’m not angry, just shocked,” said Martinovic. “This is the worst crisis in 75 years, and I picked now to go back to school.”
Like many others, Steve Park, a student at the Haas School of Business at Berkeley, has reassessed his plans in the wake of the financial crisis. After spending a summer at Lehman Brothers’ Asian division, Park thought he had found his calling. But the company went belly up two weeks after he got back to school.
Unable to find a job in investment banking, Park has switched to consulting. That’s OK, he says. Given the crisis on Wall Street, Park is not even sure it’s the place he wants to be right now. He’s wary of an industry that rewarded risk-taking with giant bonuses and helped bring down the global economy.
“To be honest, my enthusiasm for jobs in the financial services sector waned,” said Park, 31. “Wall Street is in such terrible shape, and I question not only the model, but also the motivations of the people responsible.”