The economic chill has begun to burst the MBA bubble.
According to WSJ, unemployment rates among MBA graduates from top business schools like Harvard, Stanford, and MIT have reached new highs.
In 2023, even 20% of HBS graduates couldn't find jobs?
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Of course, this includes both voluntary and involuntary unemployment—for example, those who received offers but turned them down.
After all, HBS tuition is $100,000 a year; sensible people would consider the return on investment when job hunting.😅
You can't blame them for being picky—the market is indeed sluggish, and good offers are scarce. Even unemployment rates at consulting powerhouses like Ross and Duke have risen, making the MBA job market truly grim.
Is the MBA bubble here?
The MBA job market in recent years has been unprecedentedly tough. Even graduates from the world's top schools may still face the predicament of being jobless upon graduation.
Harvard Business School's 2023 employment report shows that 73% of MBA graduates sought jobs directly, 86% received offers, and 80% accepted them.
Compared to previous years, employment data has been declining. 95% of HBS 2022 grads received offers, and 96% for the class of 2021.
With the poor economy, the proportion of graduates going directly into the workforce has also declined.
27% of HBS 2023 MBA graduates did not seek jobs, opting instead to start their own businesses, pursue further studies, or return to the employers who sponsored their education.
Not just HBS; the proportion of Stanford GSB graduates receiving offers within three months also fell from previous years' 93% to 89%.
The unemployment rate for MIT Sloan MBA graduates has also risen from 5% in 2021 to 13.1% today.
Employment data at Chicago Booth also showed a slight decline compared to previous years, with the proportion receiving offers dropping from 96.8% for the class of 2022 to 95.6%.
Are elite MBA graduates no longer hot? It seems the economic downturn is leveling the playing field for everyone.
Typically, top MBA grads head into finance, consulting, and tech companies, but these companies have been slowing hiring in recent years. Firms like Bain and EY have delayed new hires' start dates, while tech companies have reduced or frozen recruitment to cut costs in the post-pandemic era.
Amid market uncertainty, more companies are taking a wait-and-see approach to graduate hiring.
Under current job pressures, some MBA graduates are also considering other directions.
The head of the career center at UT Austin's McCombs School of Business said that the class of 2023 is seeing a wider range of industries, such as retail and manufacturing.
According to the head of MIT Sloan's career center, graduates who were more flexible about location, role, and industry had an easier time finding jobs. They moved beyond the "finance, tech, consulting" trio and entered traditional sectors like agriculture, winemaking, and healthcare.
Perhaps the only good news is that MBA starting salaries have risen somewhat.
The median salary for HBS 2023 graduates reached $175,000, up about 17% from $150,000 for the class of 2021.
Stanford GSB graduates' median salary also exceeded $182,000, up about 16% from the class of 2021.
It can only be said that those who have landed jobs still earn handsomely. But the majority are those who haven't yet secured positions.
Top School Graduates, Employment Struggles
Jenna Starr is an MBA graduate from Yale. After more than eight months and over a hundred job applications, she recently received an ideal offer—as an analyst at a pharmaceutical company.
Compared to others, she's already lucky. Another Yale MBA grad, AJ Edelman, pessimistically says he might still be job hunting a year later.
One Harvard MBA graduate admitted that in order to look for a job in New York, he is now couch-surfing.
UT MBA graduate Melendez said: "The job market is extremely tough."
Before pursuing his MBA, he was an engineer, hoping to transition into a tech strategy or product manager role at a tech company after graduation. For his MBA, he took on significant debt and had to cut back on daily expenses.
Since graduating last May, he has interviewed with many small tech companies, e-commerce firms, retailers, and manufacturers, yet still hasn't received an offer.
Perhaps the MBA employment winter has truly arrived.
In the past, many used MBA programs to switch career tracks, but companies are now more pragmatic; they prefer hiring people with industry experience rather than fresh MBA graduates.
A top MBA program costs roughly $200,000, so graduates must consider ROI when job hunting. However, traditional high-paying industries—consulting, tech, and finance—have all tightened hiring in the economic chill, even cutting off their tails to survive.
Tech Giants Begin the Year with Layoffs
Tech companies continue to lay off staff at the start of the year, and the job search outlook for early 2024 remains bleak.
Amazon
Earlier this month, Amazon's live-streaming platform Twitch announced it would lay off about 500 employees, or 35% of its workforce.
Prime Video also plans layoffs, expected to affect hundreds.
Additionally, Buy with Prime plans to cut 30 jobs, less than 5% of its staff.
Earlier this month, Google laid off about a thousand people. According to media reports, departments including engineering, hardware, and Google Assistant each cut hundreds of roles.
But Google did not comment on specific numbers, perhaps having learned from the public relations pressure of last year's large-scale layoffs.
Last January, Google cut 12,000 jobs, about 6% of its workforce.
Google CEO Sundar Pichai said the company would continue layoffs in 2024. He indicated that this year's layoffs would not be on the same scale as last year and "will not touch every team."
Last month, Google launched its large AI model Gemini, aimed at competing with GPT-4. It's expected to be costly going forward, and AI will also replace some human jobs; coupled with early-year earnings pressure, layoffs have become almost inevitable.
2024: Layoffs Continue
At the start of 2024, tech companies have already laid off nearly 10,000 people.
In addition to Google and Amazon mentioned above, others include:
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Wayfair: 1,650
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Unity: 1,800
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Flipkart: 1,100
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Discord: 170 (17%)
......
It's not just tech companies; layoffs are happening across industries, including banking, finance, and retail.
Citi
Citi plans to cut 20,000 jobs over the next two years.
The company's financial report shows a net loss of $1.8 billion in Q4 2023, its worst in 15 years.
BlackRock
Well-known investment bank BlackRock plans to cut 600 jobs, about 3% of its workforce.
Macy's
Macy's plans to lay off 2,350 employees (about 13%) and close five stores.
According to Forbes, over 305,000 employees in the U.S. lost their jobs in the mass layoff wave last year, with tech giants leading tens of thousands of cuts throughout the year.
We thought getting through 2023 would be the end of it, but now it looks like 2023 might have been the best year.
Being laid off later is no better than being laid off sooner; at least the severance packages are bigger. Now big companies have gained layoff experience—they slash without warning, leaving no time to react.
The wave of layoffs is not over. Besides the overhiring by tech giants during the pandemic years, the spread of AI and automation across industries means the future job market looks truly grim, and it will be tough for all graduates.
Now, blindly pursuing once-hot, easy-employment majors like MBA or CS for graduate study is past its golden age.
As the economy declines, no sector is spared; there is no golden bowl. In choosing schools and programs, one needs more calm analysis and rational choices.
Only those who truly love their field can stay calm in the tide of career development, not blindly chasing trends nor easily discouraged.
Studying is about applying knowledge, not using a degree as a get-out-of-jail-free card. Companies look for the most suitable person, not the most prestigious degree. Graduation is just a new beginning; there is still much to strive for ahead. Let's encourage each other.
