The phone calls they've been dreading began coming in yesterday. Business school students with job offers from Bear Stearns (BSC) started to hear that their summer internships and full-time associate positions with the battered financial firm were gone.
Brian Marchiony, a spokesman for JPMorgan Chase (JPM), which is acquiring Bear Stearns, confirmed Apr. 3 that company officials were communicating with students this week to tell them whether or not their job offer was rescinded. He said that some students retained job offers if their position didn't overlap with jobs being filled by JP Morgan. "Executives from both JPMorgan and Bear Stearns made every effort to make decisions quickly so students weren't in the dark for too long," Marchiony said.
Marchiony declined to say how many jobs were affected, but a career-services counselor from New York University said about a dozen students from that school had their job offers rescinded.
Bad News at a Bad Time
The fate of the students' job offers was uncertain since JPMorgan announced it was taking over Bear Stearns on Mar. 16. Pamela Mittman, the assistant dean of career services and student activities at NYU's Stern School of Business, said the job turnabouts were the first encountered by the school since the 2001 recession.
They also come at a time of heightened nervousness in the business school community over job prospects in general as the economy appears to be slipping into recession.
Marchiony said JPMorgan will continue to honor the offers that JPMorgan gave to students this year. He also said some Bear Stearns offers will remain in effect. "The offers that will continue to be honored by Bear Stearns will be those offers where there is no or little overlap in the businesses with JPMorgan," Marchiony said.
Keeping the Bonuses
Students with offers from Bear in units such as asset management, commodities, prime brokerage, and portions of fixed income and sales—areas that JP Morgan wants to strengthen—will likely get to stay on with the company.
Those whose full-time offers were rescinded will still get to keep their signing and relocation bonuses, and will have access to career-service resources at JPMorgan, Marchiony said. The company is offering those students with rescinded summer internship offers a full 10 weeks pay if they decide to accept a job offer at a nonprofit for the summer.
The news spread quickly through the business school community. Bear Stearns is the only investment house that has rescinded job offers this recruiting season, but career-services officials worry that the job unease in the financial-services sector could spread to other firms.
On Edge Since Merger
"It sounds like the shoe has dropped," said Tom Kozicki, board president of the MBA Career Services Council, the umbrella group of school career placement officers. "I think it is unfortunate, but I don't think it comes as a surprise to most people. The economy is shaky, [Fed Chairman Ben] Bernanke has indicated that he thinks we are going into a recession and I think that students need to be prepared for some uncertainty in the market."
Mittman said NYU officials have been in close contact with officials from Bear Stearns and JPMorgan since the shotgun merger was announced. She said they were told Apr. 2 that about a dozen students at the school with job or internship offers would soon be receiving a phone call letting them know their full-time or internship offers were officially rescinded. Students affected were those with offers in Bear's investment bank, sales, and trading and research units, Mittman said.
"The bank called us first thing in the morning yesterday and then made a personal phone call to each student impacted," Mittman said, adding, "We are very prepared to assist any student who might face challenges and [fortunately] it is a small group so we can be extremely hands-on in helping them figure out their next steps."
Facing an Uncertain Future
Mittman said she is encouraging students to reach out to alumni, get in touch with their former colleagues, use the school's job boards, and attend job fairs. She is optimistic that these students will be the only ones to have job offers rescinded this year, she said, unlike the last recession when a number of companies that hired Stern students had to cut back.
"We haven't experienced this since 2002, but even with the graduating class of 2001, we didn't have a significant number of offers rescinded," Mittman said. "We're very pleased the impact of those market changes is not at all similar to the way it was in 2001."
That's not to say it's easy for those students who expected to be full-time associates at Bear this year and now find themselves with just a few short weeks until the end of school to find a job. One NYU student, who did not want to be identified and had a job offer lined up with Bear, said in an e-mail he does not know what the future holds for him.
"I'm not sure what we are all supposed to be doing now with the few weeks before start-dates, but I would imagine that, like me, the other 25 or so students who were to start as associates are all in a mad scramble to figure out what the future holds," he said.