25% Decrease in MBA Applications Since COVID-19
MBA Graduates Also Struggling to Find Opportunities
As top-tier U.S. business schools (MBA programs) responded to large-scale layoffs by IT companies amid recession concerns since last year, they have been offering benefits such as waiving entrance exams to attract laid-off workers as students. This is seen as an effort to find solutions amid a decline in MBA applications following the COVID-19 pandemic.
On the 8th (local time), Bloomberg reported that about 12 MBA programs have taken measures such as waiving the GMAT or GRE exam score submission requirements or application fees for unemployed applicants.
Northwestern University waived exam scores in November last year, Massachusetts Institute of Technology (MIT) extended the application period in the same month, and UC Berkeley not only extended the deadline but also waived application fees. All three MBA programs are ranked in the top 10 of the "Best U.S. MBA Programs" announced by the U.S. news weekly US News & World Report.
In addition, Georgia Tech, New York University, UCLA, Cornell University, Duke University, and Dartmouth College have provided various MBA enrollment benefits such as ▲exam waivers ▲application fee waivers ▲application deadline extensions to IT company unemployed individuals from late last year to early this year.
Bloomberg stated, "Writing an MBA application requires writing essays, obtaining recommendation letters, and submitting exam scores to schools, which can take over a year just for preparation." It added, "Waiving these exam-related requirements significantly reduces that time."
The reason why leading U.S. MBA programs are taking such measures to attract students is due to a significant drop in applicants.
According to a survey by the Graduate Management Admission Council (GMAC), domestic applications to U.S. MBA programs decreased by 25% from 2021 to 2022. Although international applications increased by 19%, partially offsetting the decline, it became important for MBA programs to boost the reduced domestic application rate. Bloomberg reported that prestigious MBA programs such as MIT Sloan School, Stanford MBA, Harvard MBA, and University of Pennsylvania Wharton School also recorded double-digit percentage declines in application rates from 2021 to 2022.
MBA programs have turned their attention to unemployed workers laid off from IT companies. This was based on the judgment that suddenly unemployed professionals would view an MBA as an opportunity to build their careers. Generally, MBA application rates tend to decline when the job market is strong.
Big tech companies including Google and Amazon, as well as other IT firms, have conducted successive layoffs since last year. Meta Platforms, Facebook’s parent company, laid off 11,000 employees; Amazon 18,000; Alphabet 12,000; and Microsoft (MS) 10,000. Bloomberg estimated that 137,000 people have lost their jobs in the global IT industry from October last year to the present.
Nydia McGregor, Associate Dean of the MBA program at Santa Clara University located in the heart of Silicon Valley, said, "The number of inquiries has clearly increased." This MBA program offers exam and application fee waivers along with scholarship benefits.
However, Bloomberg reported that even within the same MBA programs, students nearing graduation are struggling to find jobs due to the ongoing layoffs in IT companies. For example, the proportion of graduates from Northwestern University’s Kellogg School MBA who secured jobs in IT companies fell to 21%, a 5 percentage point decrease compared to the previous year. Bloomberg also reported that the employment rate and starting salaries for other MBA graduates in IT companies have declined further.
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