Wall Street banks and other large companies are cutting paid summer internships in an effort to cut costs, reportedly increasing competition for the few attractive jobs that remain.
Goldman Sachs is hiring 200 fewer summer analysts this year than it will for 2023, while JPMorgan is cutting its summer analyst class by 600, more than 10%. Financial Times It was reported on Monday.
Earlier this year, Elon Musk’s Tesla cut most of its usual 6,000 summer internships and canceled offers just weeks before college students were due to start work.
The dramatic change comes after hedge funds like Citadel paid selected interns roughly $20,000 a month to attend an 11-week “math boot camp” in 2023, The Washington Post previously reported.
But the costs of luring interns to recreational events under the guise of team-building training, housing costs, and on-campus recruiting efforts all eat into the bottom line.
Industry experts say cost-conscious companies over-hired fresh graduates after the pandemic, leading to the elimination of white-collar jobs and leaving little room for interns to take over.
“If I was a CEO looking at what to cut, this would definitely be first on my list,” Matthew Hora, an associate professor at the University of Wisconsin-Madison who studies internships, told the Financial Times.
ZipRecruiter said white-collar internship job postings have fallen 14% since last summer, while Indeed said job postings have fallen 14%. Decreased by 17%.
“I think this reflects the industries that tend to hire interns. [having] “We’ve seen a significant decline in job advertising, particularly for traditional white-collar corporate roles,” Nick Bunker, director of economic research at Indeed, told the Financial Times.
Overall, finance and consulting saw the biggest declines in job advertising, Banker added.
Fewer jobs mean more competition: Goldman Sachs received 315,000 applications for just 3,000 jobs, more competition than Harvard University, according to the Financial Times.
JPMorgan has received 493,000 applications, up 82% from last summer, according to the Financial Times.
“The application process for internships has become just as competitive as full-time jobs,” Leslie Mittler, a career coach who specializes in college students, told the Financial Times.
But Bunker said there was “no need to sound the alarm.”
He called this year’s drop in job openings “moderate” because internship openings have spiked in 2022 and 2023, the first years when summer fully resumes post-pandemic. Though down from last year, summer job openings are still up 26% since 2019, according to Indeed’s research.
A JPMorgan spokesperson told The Washington Post that this year’s summer internship numbers were 4,400, “which is consistent with our 2022 intern numbers and normalizes from last year, when we saw significant growth and expansion of our business.”
“Overall, the number of summer interns has increased significantly over the past four years, up from 3,100 in 2021,” the rep added.
Bank of America employees told The Post they hadn’t seen any changes to the bank’s summer internship class and that the CEO had recently bragged about hiring thousands of new interns and full-time employees.
Recent college graduates who have work or internship experience related to their degree are more than twice as likely to land a “good” job after graduation. According to Gallup data from 2017,.
However, securing an internship comes with many challenges.
According to Gallup data, the most commonly cited reason among students for not completing an internship during college was the difficulty of obtaining one.
Internships are known to be more difficult for first-generation and low-income students who can’t afford to work unpaid hours.
