MBA Class of 2022 graduates were clearly impacted by the softening in the technology sector in 2022 after the pandemic-fueled growth in tech industry jobs in 2020 and 2021. Compared to the Class of 2021, Class of 2022 graduates were offered fewer jobs in the technology industry, leading many graduates in search of other options. Fortunately, consulting firms increased hiring for the Class of 2022 to help offset the decline in tech industry hiring. Will this growth in consulting jobs last or is the decline in tech jobs an early sign of an overall MBA job market slowdown for the Class of 2023?
During the height of the pandemic from 2020 to 2021, the strong growth in online consumer activity increased revenue for technology companies. This led big tech firms like Amazon and Alphabet to increase MBA hiring from 2020 to 2021. In addition, the low interest rate environment in 2020 and 2021 increased tech company valuations, which motivated venture firms to fund more tech start-ups. This increased demand for MBA talent from venture-backed tech start-ups as well. These trends boosted tech industry jobs to all-time highs for Class of 2021 graduates at many MBA programs.
However, by early 2022, tech industry revenue growth slowed down as consumers began returning to in-person activities and spending less time online. This slowdown caused tech firms to scale back on MBA hiring in the first half of 2022 (and begin layoffs in the second half of 2022).
In fact, Mark Zuckerberg, CEO of Meta, conveyed this message in his November 2022 note to Meta employees in which he announced 11,000 layoffs:
“Today I’m sharing some of the most difficult changes we’ve made in Meta’s history. I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go. How did we get here? At the start of Covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth. Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. I did too, so I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected. Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that.”
How Did the 2022 Tech Slowdown Impact the MBA Class of 2022?
When the MBA Class of 2022 began their full-time job search in the fall of 2021, the job market was still quite strong. In fact, Class of 2022 graduates seeking employment in large tech companies had strong job prospects during the Fall 2021 on campus recruiting cycle. However, the Class of 2022 graduates seeking tech industry jobs in the spring semester (January – May) of 2022 were impacted by the slowdown in tech industry hiring in 2022.
Given this overall tech industry hiring slowdown from 2021 to 2022, quite a few MBA programs reported a decline in tech industry jobs accepted by the Class of 2022 compared to the Class of 2021.
To illustrate this, here is a chart showing the Class of 2021 tech industry placement statistics for 22 full-time MBA programs, organized by the business schools* sending the highest percentage into tech jobs in the Class of 2021, a peak year for MBA job acceptance in the tech industry:
For 10 of these 22 MBA programs, 25% or more of the Class of 2021 graduates accepting jobs accepted jobs in the tech industry. Foster (45%) leads the way, followed by Haas (34%), Anderson (33%), Kellogg (30%), Marshall (29%), and Stanford GSB (29%). In contrast, CBS (15%) and Tuck (15%) had the smallest percentage of graduates accepting tech industry jobs in 2021.
For comparison, here is a selection of 22 full-time MBA programs* sending the highest percentage into tech jobs in the Class of 2022:
For the full-time MBA Class of 2022, only six of the 22 MBA programs still had over 25% of graduates accept tech industry jobs. Foster (48%) leads the pack, followed by Anderson (34%), Haas (33%), Stanford GSB (30%), Marshall (29%) and Tepper (28%).
You can see this decline in tech industry jobs accepted from 2021 to 2022 in the following chart*:
As one might expect, the five MBA programs with the highest placement in tech (Foster, Anderson, Haas, Stanford GSB and Marshall) are all located near the tech hubs on the West Coast of the U.S. In addition, these schools had minimal declines in tech jobs accepted for the Class of 2022.
Relatedly, here is a chart sorted by which top MBA programs* reported the largest percent decline in tech jobs accepted from the Class of 2021 to the Class of 2022:
When comparing tech industry jobs accepted by the full-time MBA Class of 2021 vs. the Class of 2022, 15 of the 22 MBA programs report a decline. Of the remaining seven schools, three business schools (HBS, Marshall and Tepper) reported no change in the percentage of tech jobs accepted and four MBA programs (Stanford GSB, Anderson, McDonough and Foster) actually increased their tech jobs accepted.
Based on reviewing these charts, there are some location-based trends. MBA programs located in the U.S. Midwest such as Kelley (-10%), Kellogg (-9%), Booth (-8%) and Ross (-8%) showed the biggest decline in percentage of tech industry jobs accepted while West Coast-based schools, such as Anderson, Haas, Stanford GSB and Marshall, showed minimal change in tech industry jobs accepted by their MBA graduates. Foster even posted a 3% increase in tech industry jobs accepted. On the East Coast, four business schools with deep ties to New York City, such as CBS (-1%), Johnson (-2%), Stern (-2%) and Wharton (-3%), had modest declines. Perhaps this is due to their proximity to the tech scene in New York City.
Shift from Tech Jobs back to Consulting Jobs
The decline in tech industry jobs accepted was offset mainly by increases in consulting jobs accepted. The chart below shows the percent change in tech, consulting and finance jobs accepted from the Class of 2021 to the Class of 2022 at 22 MBA programs*.
One trend among these 22 MBA programs is a general migration from tech industry jobs accepted in the Class of 2021 to consulting jobs accepted in the Class of 2022. For example, 15 of the 22 business schools reported a decline in tech industry jobs accepted while 17 of 22 business schools reported an increase in consulting jobs accepted.
We can also observe the large percent growth in consulting jobs accepted in the Class of 2022 at Goizueta (+18%), Kelley (+13%), Yale SOM (+12%) and Tuck (+11%). In fact, this growth in consulting outpaced the decline in tech industry jobs accepted at all four schools. It will be interesting to see if these business schools will be able to sustain this increase in consulting jobs accepted for the Class of 2023. In contrast, Stanford GSB bucks the trend by posting a 1% increase in tech jobs accepted and a 3% decrease in consulting jobs accepted.
In Conclusion
There clearly has been a general decline in the percentage of tech industry jobs accepted and an increase in the percentage of consulting jobs accepted from the Class of 2021 to the Class of 2022 at most full-time MBA programs. It is possible that the business schools are just reverting back to their historical job placement strengths, with Haas MBA graduates staying focused on tech jobs while Kellogg and Tuck MBA grads return more to consulting jobs and Booth MBA grads return more to finance jobs. In addition, business schools located near tech hubs in New York City and California retained their tech placements compared to business schools farther away from tech industry hubs.
On the other hand, given the slowdown in overall economic growth and rising interest rates in the second half of 2022, we expect that the MBA hiring market will likely soften for the Class of 2023. The growth in consulting industry jobs accepted in the Class of 2022 doesn’t seem sustainable for 2023, and recent layoff announcements at tech and finance firms all point to a more challenging job market for the Class of 2023. Of course, it’s important to keep things in perspective as many business schools posted record-breaking average starting salaries for the Class of 2022 and the long-term Return on Investment (ROI) for graduating from a top business school remains very strong.
*Note: Darden and McCombs data were not included in the analysis because they had not released their 2022 employment reports at the time of publishing this article.
