Date:21/09/2008 URL: http://www.thehindu.com/2008/09/21/stories/2008092155611300.htm

Business

U.S. crisis casts shadow on IIM hirings

Indrani Dutta

KOLKATA: The ripples of the unfolding financial crisis in the U.S. is touching the Indian Institutes of Management. For some of them such as the IIM Calcutta (IIM-C), investment bankers such as Lehman Brothers or Merrill Lynch have been among the biggest recruiters, offering the fattest pay packets.

According to a student on the Joka campus here, Merrill Lynch, which was bought over by Bank of America, picked up 18 students in a batch of 290 last year for postings abroad in New York, London, Hong Kong and in India with payouts in tandem with locations. But typically an India posting would bring a salary of around Rs. 30 lakh annually plus bonuses. Lehman had trained nine interns last November as part of its summer training and it returned to the campus sure of firm offers of plum jobs. Not any more.

A student placement representative told The Hindu that “there has been no official intimation as yet from the investment bankers.”

Although the crisis in the U.S. financial markets had been looming large for nearly a year now, the fall of widely respected names in the investment banking industry had caught almost everyone unawares.

Kolkata bucks trend

As recent as September 4, the IIM-C concluded its pre-placement offers (PPOs) for the 2009 batch with students bagging offers from consulting firms, investments banks, commercial banking and management and marketing firms.

“Notwithstanding the prevailing negative sentiment, especially in the international banking sector, IIM Calcutta has managed to buck the trend with its summer internships,” a communication from the institute said. Apart from the consultancy majors, Merrill Lynch, Morgan Stanley, Lehman Brothers, Barclays, HSBC, Credit Suisse and Citibank in the investment banking sector decided to give final job offers midway through the academic year itself.

Admitting that students holding many of the PPOs may have to look elsewhere now, the institute was unwilling to harbour any feeling of circumspection about the entire episode.