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NewsvineApplying to a summer internship at a top management-consulting or investment banking firm is like applying to Stanford: there are many qualified people for very few spots. However, the competition has not discouraged hundreds of Stanford students from interviewing for these coveted internships — spending many hours revising their resumes, practicing for the case interviews and studying the Wall Street Journal.
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But as firms begin narrowing their choices, some Stanford students worry that the weakened economy has further decreased their odds of being offered an internship.
The mortgage crisis has had such significant effects on some banking firms that even their internship programs have been affected. Earlier this year, the investment-banking arm of Citigroup, a major American financial services company that faced heavy losses after the mortgage crisis, cancelled interviews at Stanford after management placed a hiring freeze on the company.
“All of the banks with the exception of Goldman Sachs have laid off full-time workers,” said Randy Yang ‘09, who is applying for a consulting internship this year after working in investment banking last summer. Although recruiters have tried to assure potential applicants that they would maintain the number of summer internships, Yang said he expects investment banks to foresee a market slow down and to react by hiring less help.
The economic crunch and widespread layoffs at many prominent investment banks may prove disadvantageous even to those lucky enough to receive a summer internship, if they hope to translate their summer work into full-time employment. Paul Yun ‘09, a copy editor at The Daily and a former investment banking intern, said he expects that firms will offer full-time positions to a much smaller percentage of summer interns.
“You’re going to have to perform at a much higher level to be given a full-time position,” Yun said.
Matt Kinskey ‘09, a public policy major who applied to several leading consulting firms, fears that the dipping economy will affect the number of consulting interns hired this year. He worries that the subprime mortgage crisis that significantly wounded the financial industry in the past year has weakened the demand for management consulting.
“There’s a general sense that it was going be tougher this year,” said Dan Steefel ‘09, who decided in early fall to apply for summer internships at investment banking and management consulting firms.
Steefel said he knew both recruiting processes would be very competitive, especially consulting, which recruits from a larger pool of applicants than investment banking.
“Consulting draws from a wider range of majors because banking relies more on the quantitative side,” he said.
The Stanford Career Development Center will not have information on the number of internships offered by consulting or investment banking firms until the beginning of spring quarter. However, several consulting firms have signaled that the internship recruitment process will remain consistent, even during tougher economic times.
A consultant at Boston Consulting Group (BCG) who recently recruited at Stanford said that the firm was hiring no fewer interns this year than in years past. Consulting firms took a lot of backlash in the past when they rescinded offers made, he said, and they do not want to cut the ties that they have at top universities. Bain and Company has also signaled via email that it will be “consistent in [recruiting] approaches during the good times and the bad.”
“We’re offering as many or more internships than ever before this year,” said the consultant at BCG, who asked not to be named so that he could speak candidly. “Firms are busy these days and are wary of overreacting to a negative economic downturn.”
The BCG consultant said that the candidates at Stanford tend to be the most qualified and most prepared for the interview process. Nevertheless, the consultant said the application process was still very competitive this year and offers from BCG were only extended to about six Stanford students of the approximately 80 that applied.
Bev Principal, assistant director of Employment Services at the CDC, said that internship programs are very valuable to employees and are not likely to be cut, even under severe economic downturns. Undergraduate internship programs allow employers to prescreen future employees and to create buzz on campus about a company.
“An internship program is worth its weight in gold when it works well and gets good students to work for you,” Principal said.