Recent entrants hit hard by redundancy purges

'The bloodletting really began in October last year,' says a graduate from the class of 2000 at Insead, one of the top European business schools. 'It's been carnage. Of the 20 people who went to work for my employer [a bulge-bracket US bank] in London, there are only four left.'

Graduates of the London Business School (LBS) recount a similar tale of woe. An LBS MBA working in a bulge-bracket bank says: 'About 75% to 80% of the class of 2000 that went into investment banking have been laid off. Hardly any of those have been re-employed.'

People who entered the industry at the height of the last boom have proved particularly susceptible to the bust, he says. Not only have they fallen foul of a 'last in, first out' mentality, but their sheer numbers made them vulnerable when the rosy conditions of 1999 and early 2000 came to an end.

The Insead 2000 graduate says: 'The banks' recruiters believed their own hype. They took on twice as many people as before and then there was nothing for them to do. Because of the quantities hired, everyone became a unit of resource instead of a person.

'No-one was particularly well known, and this made it easier for them to be got rid of. People are very annoyed.'

Banks are at least sympathetic to their predicament. The head of graduate recruitment at a US bank in London says: 'You have to feel sorry for the MBAs. A few years ago, an MBA was the path to El Dorado. Unfortunately, nothing is without risk. People invested a lot of time and money in their career. In the short term at least, it has often come to nothing.'

Outplacement consultants have been deluged with talented under-30 year-olds. Tom Kollinsky at BG Careers in London says: 'We see some associates and graduates who, for the first time in their lives, feel as if they have failed.

'Many have graduated from top universities and business schools with top degrees, and suddenly they are brought up short in their late 20s. It can be very difficult to come to terms with.'

Coming to terms with redundancy is easiest for those with only first degrees. Many, such as Ella, a 26-year-old Italian made redundant from a US investment bank in London, are taking MScs or MBAs in the hope that things will have improved when the course ends.

She says: 'It's a real trauma for someone who has done well and is ambitious, and doesn't deserve this kind of treatment. But I really want to work in the industry and I will try very hard to get back there.'

Going back into education is not for everyone, however. Another 2000 graduate, contemplating the MSc course at City University in London, says: 'It's a big investment. If I'm going to spend 14,000 (€22,500) and take a year out, I have to know that a job will be there for me at the end of it. That probably means getting a distinction, so the course is going to be quite pressured.'

Without an additional qualification, graduates who are made redundant part of the way through training can easily fall through the recruitment net.

BG Careers' Kollinsky says: 'Most big banks undertake their graduate recruitment six to nine months in advance. Redundancies are rarely timed to correspond to the recruiting timetable.'

He adds that some redundant trainees are better positioned than others. 'If you have spent two years rotating between departments as part of your training in an investment bank, then you will not find it easy to gain a placement elsewhere. People with a product specialism are likely to find it easier to get back in,' he says.

ING Barings is one of a number of banks that have hired graduate trainees made redundant by competitors. Jackie Moylan, head of graduate recruitment at ING Barings in London, says that individuals can sometimes start anew as a graduate trainee. Many of those coming in that way are resentful of their previous employers, she says.

'At ING Barings, no one has ever been made redundant before, during, or immediately after training. It's a question of brand management. People will not forgive the employer that scuppered their career before it had even begun.'

Psychologist Phillip Hodson, who has counselled some of the redundant graduates and MBAs, is less prosaic. He says the 'broken-hearted' class of 2000 are likely to prove disloyal employees. 'It's just like falling out of love. If you have never been made redundant before, it will come as a shock. But after the first time, you will never fully trust your employer again,' he says.