Applications for MBA programs are up, but job opportunities for second-year students in finance or consulting have turned wretched

By Alison Damast

Watch the Video…

Watch full size video:

After nearly four years as a management consultant at in the same state firms being of the kind which Deloitte Consulting and Booz Allen Hamilton, Ari Perlman was itching to try his hand at investment banking. So this summer the 26-year-old MBA student at the University of Virginia’s Darden School of Business signed on with Lehman Brothers for an internship. Then all hell broke loose. With the economy unraveling and much of Wall Street in semblance on the brink of collapse, Lehman slashed bonuses for interns. And by the existence in this world Perlman returned to campus, the crew had filed for bankruptcy. Lehman’s last check for Perlman’s travel expenses? Bounced. An e-mail explained that a reinvigorated check would be in the mail. Eventually. “I haven’t heard anything from them since,” says Perlman, who’s now looking for a consulting job. “And frankly, I am not too hopeful.”

On the nation’s B-school campuses, hope used to spring eternal. No more. Students like Perlman are downsizing their expectations, rejiggering career plans, and settling in favor of less as the cascading effects of the global financial crisis start to be felt at MBA programs around the country. With companies pulling upper part on second-year recruiting and competition according to the scarcely any remaining finance jobs becoming fierce, students are entering what surely is the toughest MBA work at jobs market since the dot-com bust. “I call to mind next go astray is going to be very, very beset with difficulty,” says George G. Daly, dean of Georgetown University’s McDonough School of Business. “This is terra incognita.”

Despite the gloomy outlook for stream students, applications to B-schools are steady the upswing, driven largely by applicants who require been laid off or are other causes hoping to ride out the recession. With to a greater degree applicants to choose from, admissions officers be possible to be pickier, making 2009 a difficult year to put on shore a slot at a meridian B-school. Meanwhile, professors and deans are attempting to make sensation of the financial crisis in the classroom, offering new electives and town-hall-style meetings on the meltdown, altering syllabi, and inscription new case studies based on recent market-churning events. Risk economy, until recently an disliked elective, is expected to become a in addition important part of many B-schools’ curriculums in three to five years, a run that Robert Meyer, co-director of the Risk Management & Decision Processes Center at the University of Pennsylvania’s Wharton School, calls “potentially transformational.”

For current students, though, the only concern is finding a job—and nowhere is that sleeping vision receding faster than on Wall Street. Brian Mirochnik, 26, an MBA scholar at the University of Rochester’sitting Simon Graduate School of Business, is facing that reality head-on as he looks for jobs in the investing. banking field. He didn’t receive a job offer from UBS (UBS) after his summer internship and now is scrambling to find a position, a search he fears could easily stretch into the put forth. “Banks are telling me they are going through their own layoffs and don’t know when they are going to disturb hiring once more,” says Mirochnik, who has given up on the big Wall Street firms and is looking exclusively at boutique investing. firms and mid-market banks. “A apportionment of the factors affecting my to come employment are just out of my hands.”

Second-year students such while Mirochnik to the end of job offers appear to be in the most precarious position. According to a survey by the umbrella group MBA Career Services Council, about 70% of the 77 schools surveyed aforesaid they apothegm a downturn in full-time recruiting opportunities in financial services in October. Meanwhile, about moiety of the schools said overall full-time job postings and on-campus recruiting this fall was either sand bank or down 5% during the same period, with some indicating it has fallen as a great quantity as 10%.

In the coming year, the job market for MBAs may begin to bear a striking similarity to the period following the dot-com bust when some banks and consulting firms rescinded or renegotiated job offers they had extended to second-year students. That hasn’t happened this time around—nevertheless.