Although the United States is not technically in a recession, some major companies have begun slowing hiring or laying off employees, raising concerns for students hoping to enter the job market.
Adnan Bseisu
Contributing Reporter
Zoe Berg, Photo Editor
Job recruitment season has hit for Yale seniors, but recession fears have put a damper on some students’ employment outlooks.
High inflation rates and aggressive monetary policy have set economists and companies on edge. A recent PwC survey estimates that over half of U.S. companies are expecting to freeze hiring within the next year amid mounting fears of a recession. Investment bank Goldman Sachs and Facebook-owner Meta Platforms, both of which appeared in Yale College’s top five first destinations for the Class of 2021, are laying off employees and, in the case of Meta, freezing hiring entirely. The Yale Office of Career Strategy, meanwhile, claims that students should not be alarmed by economists’ prognoses.
“We are tracking trends, and we haven’t seen any specific evidence that tells us that there is going to be a slowdown on Yale hiring specifically,” said David Halek, director of employer relations at the Office of Career Strategy.
A recession is commonly associated with two consecutive quarters of falling real GDP — a threshold that the United States crossed in June 2022. But a recession can only be officially declared by the National Bureau of Economic Research, or NBER, which holistically reviews recent economic data.
While the NBER has yet to announce a recession, many economists agree that the risk of the United States entering one is rising. Goldman Sachs places the odds of a recession by mid-2023 at about 33 percent and has already begun to adapt its hiring practices accordingly. Economic theory has it that recessions lead to higher unemployment.
Concerns among seniors about a potential recession are ramping up as this year’s recruiting cycle takes shape. But Halek said that, so far, data about the Class of 2022’s first destinations, which is due to be finalized in November, is on track with the Class of 2021.
Halek did note, however, that the Office is hearing of fewer return offers for summer interns at technology companies this year. But he insisted that jobs demanding the same skillsets can be found in other industries.
“We advise students to try to stay focussed on functional areas over specific industries,” Halek said. “If someone wants to be a software engineer, and we hear that Google is pulling back on hiring software engineers, somebody who is going to have those skills can apply them in many different industries.”
Halek used the banking industry, which appears to be ramping up its recruitment of software developers who have been turned away by Big Tech, as an example.
Computer science and history major Trey Lewis ’23 is not as convinced. An influx of tech workers looking for jobs allows other businesses, like banks, to hire those workers at a cheaper level than they would otherwise expect, Lewis said.
“The problem with the banks is that they are suffering technological debt, and they don’t want to pay to get it fixed,” said Lewis, who has a job offer for a software developer role at a bank in New York City. “This is their opportunity to get really cheap good talent.”
The picture is not much clearer for ethnicity, race, and migration and environmental science major Saket Malhotra ’23. Malhotra is interested in law and paralegal positions, but says he has “to try looking at other options,” out of the fear that law firms will be hit hard by a recession.
Malhotra added that he is not alone; he and his friends are all feeling anxiety about their job searches.
“A lot of people around me are in the same boat of having to look beyond what they saw themselves doing post-grad,” Malhotra said. “I know more people are considering grad school to push [the recruitment process] off.”
Malhotra himself is considering riding out the recession at graduate school, despite originally planning to enter the job market.
Outside of the University, Americans have broader worries about the potential impacts of a recession.
Sixty-six percent of Americans were stressed that a recession was “around the corner” as of last month, CNBC reported. One survey found that 82 percent of Americans were worried that inflation would have a negative effect on their purchasing power over the next six months. A recession would likely hit Americans who do not have stable jobs or disposable income hardest.
Halek said that students who are anxious about recruitment can devise secondary plans in the job market, rather than choosing to go to graduate school if they aren’t able to get their preferred job.
“At the very least, I would suggest to students that perhaps they hedge their bets,” Halek said. “They can pursue their first, second and third career options to the fullest, and if they don’t work out, perhaps have a plan B for graduate school. But I wouldn’t say that there is any imminent need to make those plans based on what we know so far.”
Nearly seven in ten students in the Class of 2021 worked for pay full-time after graduating, while nearly two in ten pursued graduate studies.