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In the business world, delaying financial results is often a clear indicator of trouble. This principle seems to extend to business schools as well. Around Christmas—and in many cases, later than usual—top U.S. business schools released their equivalent of annual reports, which include data on the employment outcomes of graduates from their Master of Business Administration (MBA) programs. These programs, typically two-year courses designed for students with professional experience, are a key metric for assessing the value of a business education. Our analysis of the data reveals that at the top 15 business schools, the percentage of students who secured and accepted a job offer within three months of graduating—a standard measure of career success—dropped by six percentage points to 84% in 2024. Compared to the five-year average, this figure fell by eight points.
Some declines are particularly striking. The Massachusetts Institute of Technology (MIT) is widely regarded as one of the world’s top universities. However, at its Sloan School of Management, named after Alfred Sloan, a titan of the 20th-century automotive industry, the numbers are alarming. Between 2012 and 2022, an average of 82% of Sloan students seeking employment had accepted a job by graduation, and 93% had done so within three months. In 2024, those figures plummeted to 62% and 77%, respectively. At some elite schools, the situation may be even worse than it appears. One professor expressed concern that some students classified as entrepreneurs may, in fact, be unemployed. While American businesses may be thriving, those aspiring to be their future leaders are facing a recession of their own.
U.S. business schools are no strangers to criticism. The notion that business is better learned through practice than in the classroom has persisted since Harvard Business School (HBS) held its first class in 1908. In his 1994 memoir *Snapshots from Hell*, former Stanford student Peter Robinson described MBAs as “union cards for yuppies.” A 2005 article in the *Harvard Business Review* even lamented, “Today it is possible to find tenured professors of management who have never set foot inside a real business.” Critics have blamed business schools for various ills of capitalism, with some accusing their graduates of being ineffective leaders. Elon Musk, for instance, has bemoaned the prevalence of MBAs running major corporations.
The stereotype of profit-obsessed MBAs isn’t entirely baseless. A study by academics Daron Acemoglu, Alex Xi He, and Daniel le Maire found that managers with business degrees are less likely to share profits with workers compared to their peers without such credentials. Another 2007 study by Nicole Stephens, Hazel Markus, and Sarah Townsend revealed that MBA students were far more likely than firefighters to be upset if a friend bought the same car as them.
Despite these criticisms, the success of U.S. business school graduates is undeniable. Entire classes of HBS alumni have been celebrated: *Fortune* magazine famously dubbed the class of 1949 “the class the dollars fell on.” The class of 1982 included Jamie Dimon, CEO of JPMorgan Chase; Jeffrey Immelt, former CEO of General Electric; and Seth Klarman, a prominent investor. Nearly half of the companies in the S&P 500 are led by MBA graduates.
This legacy of prestige, however, depends on graduates consistently landing top jobs. After all, the primary goal of business education is to foster business success. Yet recent employment data suggest that this success is becoming less certain.
Consulting and finance have long been the primary destinations for graduates of top business schools. McKinsey, Boston Consulting Group, and Bain—collectively known as the “Big Three” consultancies—have historically been major recruiters. Many graduates return to these firms after earning their degrees, often bringing new talent with them. This symbiotic relationship between business schools and consultancies ensures a steady flow of credentialed students for the firms and reliable tuition revenue for the schools. While the share of graduates entering finance, particularly banking, has declined since the financial crisis, private equity remains a popular choice. Some students follow a “2+2+2” career path: two years in investment banking, two in private equity, and two in business school—a grueling but lucrative trajectory for some of America’s brightest minds.
However, when consultancies slowed hiring after a pandemic-era boom, business schools felt the impact. Our analysis of data from four top schools—Chicago Booth, Columbia, MIT Sloan, and NYU Stern—reveals that the number of graduates joining the Big Three consultancies fell by a quarter last year compared to the previous three years.
The tech industry’s reduced hiring of MBAs is equally concerning. The decline in recruitment by tech giants like Alphabet, Amazon, Apple, Meta, and Microsoft has been particularly sharp. At the four schools analyzed, the number of graduates landing jobs in big tech dropped by more than half last year compared to the 2018-2022 average, to just around 50.
Some of these challenges are undoubtedly cyclical. The tech sector is known for its boom-and-bust cycles. After the dotcom bubble burst, the share of Wharton graduates entering “high tech” industries plummeted from 17% to 8%. This time, however, the decline in tech’s interest in MBAs appears to have begun before the post-pandemic market correction. This suggests that companies may be losing faith in the value of professional managers. Even if consulting rebounds, the MBA may no longer be seen as essential for career advancement. Advanced degrees in science and engineering are increasingly viewed as more credible by clients of consulting firms.
What alternatives do MBA students have? A small but growing number are opting to run small businesses rather than climb the corporate ladder. Investors are funding “search funds,” where recent business school graduates attempt to acquire and operate companies. While the numbers are still modest—Stanford reports that 94 such funds were launched in 2023—the returns for investors are impressive. “It’s a lower-risk way to try entrepreneurship; the results are not as binary as starting a new company,” says Lacey Wismer of Hunter Search Capital, which backs these funds. Mark Agnew of Chicago Booth adds, “Some of the best MBA students pursue this path. It’s not the McKinsey rejects.” Interest on campus suggests that more students are likely to explore this route. According to Vanessa Abundis Correa, a student at Chicago Booth, the “entrepreneurship through acquisition” club is one of the most popular on campus.
**Donald Trump, MBA**
The challenges facing business schools extend beyond the turmoil in white-collar industries. These institutions straddle the worlds of commerce and academia, and their enthusiastic adoption of diversity, equity, and inclusion (DEI) initiatives since 2020 has entangled them in the broader crisis of legitimacy affecting universities. Sandwiched between large universities, corporations, and consultancies—all of which have aggressively pursued racial and gender diversity in recent years—it’s no surprise that some business schools have gone all-in on DEI. Wharton, for example, even allows MBA students to major in DEI.
In other ways, business schools seem out of sync with current trends. If America is indeed reindustrializing, the message hasn’t reached campus. Business remains the most popular field of graduate study in the U.S., with about four times as many students pursuing master’s degrees in business as in engineering. Will business schools adapt their curricula to reflect the realities of doing business in Donald Trump’s America? Probably not. Even if hiring rebounds, this disconnect could leave them increasingly irrelevant.