The litany of macro issues that investment banks are facing has got me wondering if there may be a corresponding hiring freeze. A freeze will obviously inspire trouble across all levels of professionals in the industry and as someone trying to secure an IB ‘24 summer internship and thus dealing with applications as early as this august, I’ve got to say that I’m fairly concerned. Thoughts?
Potential hiring freeze?
There won't be a complete hiring freeze: banks (and companies surrounding them) have learned from the past and know that this would hurt them 2-3 years down the line when things pick up again. Hiring might be slowed down, though, so I would definitely go for a summer internship as the best way in.
With an internship in 2025, I presume you will graduate in 2025 and things might look a lot brighter by then
With an internship in 2025, I presume you will graduate in 2025 and things might look a lot brighter by then
You’ll need something a lot worse to happen than stagnation for banks to completely stop hiring, even if only at the graduate level. Who is going to do all the grunt work, managing directors?
There might be reduced headcounts however due to less business, so that’s a fair worry.
There might be reduced headcounts however due to less business, so that’s a fair worry.
Nope, what I meant is reduced (“cut down”) headcount, meaning fewer seats at banking desks, meaning tougher competition. Same number of applicants vs fewer spots.
Luck plays an essential role in the hiring process at investment banks. Many banks do not change the number of spots available for summer interns but reduce the number of full-time offers for the following year and hire fewer people outside the pool of summer interns (off-cycle internships, direct full-time hires, etc.). You might not get a return offer if you do an internship during a challenging economic period even if your performance is outstanding because your team or department doesn't need new people. On the bright side, today many young professionals prefer the tech industry so the number of applicants for investment banking has declined in the last years. Overall, probably there are fewer spots at investment banks at the moment but also fewer candidates.
The tech industry has definitely grown a lot in the last decade and became comparable to the banking sector (Silicon Valley vs Wall St), but there were huge layoff last year and even now post-COVID. Just search for “tech layoffs” on Google and see what comes up. Not great. I remember an article on FT some time ago saying the best talent is now preferring banking jobs over tech again, simply due to money. So I don’t think it is any significantly less competitive to get in and is still a top destination. In other words, there is no shortage of top talent and someone who attends the lower end of the semi-targets or a non-target will still struggle the same way.
Also, on that point, the non compete contracts that many tech companies force employees to sign mean many are also forced to apply to jobs in a different industry—and, like you said, a lot of talent may choose IB as that industry of choice to move to. Do you remember the title for that FT article? I want to give it a read.