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Suddenly, This Summer

When dozens of first-year MBA students got offer letters in February to join

consulting firm A.T. Kearney's summer associate program, they were told they

had until Apr. 6 to decide. Then around mid-March, Kearney followed up with an urgent e-mail. Because so many students had accepted, the firm's recruiters wrote, those with offers still outstanding needed to make up their minds within five days. A day later, 90% of those who got the e-mail said yes, recalls Bob Chrismer, Kearney's director of global recruiting.

The Chicago firm will welcome roughly 100 paid interns this summer, 15% more than originally anticipated. Not everyone will start when school lets out, however. Kearney plans to have half start in May and the rest in July. Internships will last just seven weeks instead of the typical 10. "We didn't want to rescind any offers," Chrismer says. "This is our way of being creative."

Consulting is where many MBAs end up interning between their first and second years of B-school, and Kearney isn't the only firm juggling a bumper crop of them. Accenture will also trim its program to 8 weeks from 10-12 weeks for about 50 paid interns assigned to its strategy and business-architecture division because of an anticipated softening in business, says Erik Olson, the firm's ssociate director for advanced degree recruiting in North America.

HEAVY BREATHING. At least its interns have something lined up. The economic downturn has left many first-year MBAs scrambling to secure a paid summer gig that doesn't require them to constantly ask: "May I take your order?" Says Dan Naegeli, director of graduate business-career services at Texas A&M University: "I've got first-years breathing down my neck for any internship that comes up."

Call it the Alan Greenspan effect. A year ago, with the economy roaring, there was at least a perceived shortage of top-notch MBA interns. B-schoolers, with plenty of internship offers in hand, had room to negotiate higher pay and to pick and choose their job assignments as companies vied for their attention. Three interest rate cuts later, consulting internships are harder to land, and MBA students are more anxious. For instance, some 85% of the applicants to whom PricewaterhouseCoopers offered an internship in its management-consulting practice have accepted for this summer, vs. 50% last year. The firm has hired 75 interns for that business, about the same number as in previous years, according to a company insider.

The job market is loosening partly because the dot-com blowout has zapped campus recruiting by Net consultants, who only a year ago couldn't find enough MBAs. Moreover, consulting firm clients are starting fewer projects -- and they have plenty of full-time staffers for the work that comes in. In fact, Mercer Management Consulting has canceled its summer intern program because an above-average number of second-year MBAs accepted its offers for full-time jobs last fall.

INSTANT MESSAGE. In one recent sign of how much things have changed, a few first-year MBAs at the University of Virginia's Darden School had only minutes to decide on a summer internship. According to John Worth, the school's director of career counseling, the students all received offers in February from a well-known consulting firm.

When the firm realized last month that it was likely facing too many acceptances, it randomly pulled the names of undecided Darden students out of a hat, called them in that order, and asked them to make up their minds on the spot. According to what Worth has learned from the affected students, the company told those who

wavered that it couldn't guarantee that a job would be available later. Most of the students who were contacted took an internship. Such experiences have left first-year students with "just a tad of anxiety" about the job market, Worth adds.

In fact, many of those who've scored an internship scan the news for rumblings of trouble at their summer employer. "Students feel more at risk than before," says Dick McCracken, director of graduate career services at Indiana University's Kelley School of Management -- especially given the mountainous debt many take on to get an MBA. At the first sign of problems, he adds, students are calling employers to get confirmation that they still have a job in a few months.

DEVILISH DETAILS. American Management Systems didn't wait for such calls when it announced a round of layoffs two months ago. It whisked off formal letters to MBA students with offers from the firm and reassured them that their job wouldn't be next to go. Given the slowdown in its business, AMS will hire six to eight interns this summer, down from as many as 15 in recent years, according to director of college recruiting Allan Jones.

So far, there are few reports of firms rescinding offers for summer internships or full-time jobs, probably because doing so would damage their reputation on campus. Still, isolated cases are popping up. Assistant Dean Mike Agnew at the University of Minnesota's Carlson School says a major consulting firm recently withdrew full-time offers to two of his second-year students. Back in the fall, the firm had told the students that it only needed to "figure out the details" about the positions, Agnew says. Last month, the consultancy evidently finished its figuring, although it is hiring other students from Carlson this year.

It's still too early to say whether the slackening economy might curtail campus recruiting for MBAs looking for full-time jobs in the fall. "Companies are holding their breath," says Ann Mamallo, director of employee relations at the University

of Washington's business school. "They're estimating a six-month period of volatilty before things settle down." It will no doubt be at least that long before MBA students can settle down. By Jennifer Gill, with Mica Schneider, in New York

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