Fourth-year Ashwin Nirmalkumar already knows where he will be working next year. After interning as a summer analyst at Merrill Lynch, he was offered a full-time position for 2009 as an investor banking analyst, complete with benefits and a competitive salary.
His greatest fear is that his offer may not stand.
In an increasingly rocky economic climate, students who used to feel secure about going into the finance business may now be feeling uncertain about their job prospects.
Nirmalkumar, a business economics student, is one of those feeling the pressure of an unstable future.
At first, Nirmalkumar did not immediately accept his offer to work because he wanted to shop around. It was mid-August and the economy was bad, but not too bad.
“After all this financial stuff started happening, I signed on immediately on Sept. 12,” Nirmalkumar said.
“I knew something was going to happen to the company, and I was afraid they were going to take away the offer.”
Three days later, Bank of America bought Merill Lynch in a $50 billion transaction.
“Once Merrill Lynch got bought over by Bank of America, I was very scared if my offer still stood,” Nirmalkumar said. “Even today they can call and say there’s no job. That’s the scary part.”
To make matters worse, Nirmalkumar’s agreement with the company does not go both ways.
Even though Merrill Lynch can take away its offer due to financial troubles, Nirmalkumar must stay committed to the company. So long as he has signed a contract with Merrill Lynch, he cannot sign anywhere else.
“That’s why a lot of us ““ even the people who got an offer ““ are worried,” Nirmalkumar said.
“If we get our offers taken away, it will be too late to go to other companies, so we won’t have any job. It’s really tough. I’m gambling on this one company, hoping they’ll still keep my offer.”
Less willing to gamble with their futures, many students in the UCLA Anderson School of Management are considering the more stable option of entering the consulting business.
Arturo Madrid, a second-year MBA student focusing on consulting, said a lot more students are joining the Consulting Anderson Career Team, a networking group that assists students interested in the consulting sector.
“Last year there were about 35 people in the consulting ACT, but this year we have 81 first-years,” said Madrid, one of the consulting ACT officers.
Madrid also said that the student-run Management Consulting Association currently has more than 100 members, as opposed to the 70 of last year.
Unlike the finance industry, the consulting sector has remained relatively untouched by the credit crunch, preventing Madrid from experiencing a direct disadvantage, he said.
“The financial crisis doesn’t affect me too much, except that it increases my competition,” Madrid said.
“More and more people who normally would choose finance are starting to do consulting.”
But for those MBA students who do not wish to change their allegiance to finance, the prospect of a shaky finance industry still looms.
Brent Causey, a first-year MBA student, hopes to break into venture capitalism but knows that the recent credit crunch may have some consequences for his line of work.
As a venture capitalist, Causey hopes to invest in small starter companies with the hopes of growing them into larger enterprises.
In the recent past, there have usually been two ways to grow small companies. A venture capitalist could either sell the company’s idea to a larger company or offer the company on the public market.
But with the current financial crunch, the second option has virtually become defunct.
According to the National Venture Capital Association, the second quarter of 2008 saw no initial public offerings by venture-backed companies in the United States, making it the first time since 1978 that initial public offering activity has grinded to a complete halt.
“It’s not that easy to go public when people don’t want to buy shares from new businesses, so it’s harder for venture capitalists to make a big profit,” Causey said.
It does not help that the Dow Jones dropped a record 777 points Monday after the House of Representatives failed to pass a government bailout bill that would unclog toxic securities.
The drastic drop could be a reflection of America’s lack of confidence in the economy, Causey said.
“The stock market is all about confidence and uncertainty,” Causey said. “The bailout would help maintain certainty in the market, but the government isn’t providing any comfort. You don’t want fear, because markets are shaky when things are unknown. When people get scared, they run.”
Despite the uncertainty of the financial industry, students are demonstrating resilience and optimism in the face of an uncertain job market.
“Investment banking has always been a competitive landscape,” Nirmalkumar said.
“People who are going into this should already know that this kind of competition is a given. If you picked this industry because you like competition, then you can still get a job, you just might have to work extra hard.”