After nearly four years as a management consultant at such firms as 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 seemingly on the brink of collapse, Lehman slashed bonuses for interns. And by the time Perlman returned to campus, the company had filed for bankruptcy. Lehman's last check for Perlman's travel expenses? Bounced. An e-mail explained that a new 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 for less as the cascading effects of the global financial crisis start to be felt at MBA programs around the country. With companies pulling back on second-year recruiting and competition for the few remaining finance jobs becoming fierce, students are entering what surely is the toughest MBA job market since the dot-com bust. "I think next fall is going to be very, very difficult," says George G. Daly, dean of Georgetown University's McDonough School of Business. "This is terra incognita."
Despite the gloomy outlook for current students, applications to B-schools are on the upswing, driven largely by applicants who have been laid off or are otherwise hoping to ride out the recession. With more applicants to choose from, admissions officers can be pickier, making 2009 a difficult year to land a slot at a top B-school. Meanwhile, professors and deans are attempting to make sense of the financial crisis in the classroom, offering new electives and town-hall-style meetings on the meltdown, altering syllabi, and writing new case studies based on recent market-churning events. Risk management, until recently an unpopular elective, is expected to become a more important part of many B-schools' curriculums in three to five years, a trend that Robert Meyer, co-director of the Risk Management & Decision Processes Center at the University of Pennsylvania's Wharton School, calls "potentially transformational."