Last November, Abhimanyu Gupta, an MBA student in New York University’s Stern School of Business, was on the top of the world when he landed a job offer from Bank of America’s investment banking division. This February he felt right at the bottom of the abyss as the bank withdrew the offer and Gupta’s world cratered just like the global markets.
Now, the 27-year-old chartered accountant, who left his home Mumbai in 2007 to become an investment banker in the world’s financial capital, plans to return home if he doesn’t get an offer by June when his course ends.
With five months of recruitment time gone, Gupta concedes that his chances of finding similar job in the US, which is battling the worst downturn in decades, are bleak. His chances are as bleak as hundreds of other Indian and foreign national students across top universities in the US, UK and other western economies, who now plan to go back home. The Harvards, Whartons, NYU Sterns, Kelloggs, MIT Sloans, Michigans and Dukes – the dream destinations of students till the other day – no longer guarantee top-dollar jobs. One year of downturn has turned the students’ world upside down.
According to a recent study by the University of California, Berkeley, almost 84% of Indian students and 76% of Chinese students in the US think it will be difficult to find a job in their field in the country.
Even lenders are tightening the noose on international students. First-year MBA students, who were relying on loans from US banks to fund their second-year expenses, are in trouble because the banks have stopped lending to international students without co-signers.
Some students say the Obama administration’s move to put visa restrictions on companies accepting Troubled Asset Relief Programme (TARF), a bailout fund set up by the government to help US companies come out of the downturn, too has hit international students’ prospects there.
Now, most Indian students in the West are betting on their home country. “Not getting an offer there, they are looking homewards. Given the economic health of the US, India seems a better option right now,” says Brijtendu Sarkar, chief restructuring officer at Birla VXL, who did his MBA in general management for senior professionals from London Business School (LBS) last year.
The US has been in recession for 18 straight months now and has lost 5.1 million jobs so far. The world’s largest economy shrunk 6.1% year-on-year in the first quarter of 2009, following a 6.3% decline in the last quarter of 2008. A recovery is unlikely before the end of the year even in a best-case scenario.
Indian economy, which has seen a slowdown after growing at over 9% for three years on a trot, is still expected to grow at a healthy pace of 6-7 % in the current fiscal. India and China, the other emerging giant, are expected to bounce back faster and drive a global recovery.
In fact, according to the University of California study that surveyed 1,224 foreign nationals from India, China and Western Europe, almost 86% Indian students and 74% of Chinese students believed their home countries’ economies will grow faster in the future than they have in the past decade.
Most students coming back home are scouting for openings in sectors where they came from, as switching industries makes it difficult to get jobs. Some are approaching their seniors settled in India. Mr Sarkar himself has got three such requests.
According to Mr Sarkar, a number of Indian students in his batch read the signs early and returned home last year, to be lapped up by a booming Indian industry. Now they are helping their juniors search jobs in Asia, he adds.
While it may be easier for these students to find jobs in India, salaries here are not very attractive for most of them who are sitting on huge education loans. An MBA in a top western university costs anywhere between Rs 40 lakh and Rs 60 lakh. Also, many Indian students in the US are married and have a family to support.
Convinced that a job in India won’t earn them enough to pay off their debt and support families, some students like Arihant Chowdhury (name changed) are delaying their degrees to buy time.
The 30-year-old Michigan University’s Ross School of Business student, who didn’t get a job offer in campus placement, has delayed his graduation by six months and continues to work with a small firm where he interned. In case he doesn’t get an offer next season, Chowdhury will return to India and start his own business. He said 10-15 Indians in his batch are yet to find a job.
Even those who have found jobs this year — such as Saptarshi Ganguly of MIT Sloan who is joining McKinsey and Kaustubh Jagtap of NYU Stern – agree that the situation is quite grim. Most of the students say there has been a drop of 20-25 % in the average salary. And the quality of the jobs too has slipped. “I believe most of the students graduating during recession continue to suffer throughout their lifetime. They have to make choices about career paths that they wouldn’t have even thought in normal times,” says Jagtap, who is joining a hedge fund in New York.
A number of small and boutique companies, who never had access to top business schools earlier, are now hiring from campuses, they point out.
Little wonder then, the number of applicants for global Bschools has dwindled of late. Students prefer a seat at top Asian schools like China Europe International Business School (Ceibs) in China, Indian School of Business, National University of Singapore and Asian Institute of Management in the Philippines. “These institutes are at par with some of the best schools globally and the cost is far lower.” says Rajat Chowdhury, product head, international education, IMS, one of the top coaching institutes in India.
That doesn’t mean the London School of Business, Wharton and Harvard have lost their appeal though. Students unanimously agree what one learns in these centres of excellence is unparalleled and that products of these institutes will get their dues in the long-term . At least, that’s the hope the Guptas and Chowdhurys live with today.
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