Bear Stearns Blowup Rattles Campus Pipeline

College seniors who'd counted on launching their careers at Bear Stearns are scrambling for a Plan B that doesn't exist for many of them.

JPMorgan, which is gearing up to absorb Bear Stearns, has given mixed signals to students who were offered permanent jobs at Bear upon graduation. If their prospective jobs evaporate, the new graduates will likely find slim pickings at this late date, especially when other Wall Street firms are mired in layoffs.

The path to a Wall Street career begins with summer internships. Most new graduates with offers from Bear have all their eggs in that particular basket, having interned there for one or more summers past. Some 90 percent of Bear's summer interns are offered full-time jobs after graduation, Forbes magazine reported recently.

Ned Grace IV, a Vanderbilt senior who last August accepted an offer to work in Bear's fixed-income division, has interned there every summer since he started college. He told Forbes he has "no Plan B.... Now it's like one of those things where, who knows if it'll work out?"

Another worried prospective Bear employee in the story interned there for two summers and a winter session. That Cornell University senior said friends who interned at other big firms weren't offered jobs because of the state of the job market.

A ray of hope stems from banks' need to keep staff development pipelines flowing so they won't lose business when conditions recover. There is a sense in HR departments that Wall Street went overboard with hiring freezes and job cuts in the downturn from 2001-03, only to find themselves caught short later, when a large need for vice presidents arose and there were too few internal candidates around. Cancelling job offers also could give a bank a black eye on campuses, hurting recruiting efforts for years to come.