Are IB interns screwed?

Based on the most helpful WSO content, the situation for IB interns is uncertain but not necessarily doomed. Here's a breakdown of the key points:

1. Economic Downturn and Deal Flow: Deal activity has dropped significantly, with IB revenues down 30-50% across major banks. This decline, combined with aggressive hiring in previous years and pay increases for junior bankers, has put pressure on banks to manage costs. Some banks may reduce return offers as a way to trim headcount without resorting to layoffs.

2. Return Offer Trends: Historically, return offers are often considered "yours to lose," meaning interns typically need to underperform to miss out. However, in challenging economic times, banks may lower return offer rates to adjust for reduced deal flow and revenue. This was evident during the pandemic when some banks reduced offers to manage headcount.

3. Bank-Specific Variability: Not all banks are affected equally. For example, firms heavily reliant on M&A may face more pressure to cut offers, while those with strong performance in other areas like S&T or restructuring might maintain higher offer rates.

4. Uncertainty and Preparation: While some interns are nervous about lower return rates, others believe the impact on cheap analysts/interns will be minimal since banks still need to maintain a pipeline of talent. Interns are advised to focus on performing well and preparing for the possibility of full-time recruiting if they don't receive an offer.

In summary, while the economic environment and reduced deal flow may lead to lower return offer rates at some banks, the situation isn't universally dire. Interns should focus on excelling in their roles and be prepared for alternative paths if needed.

Sources: 2020 Intern Offer Rates, Intern Return Offer Rate, Intern Return Offer Rate, List of banks who laid off workers/had low return offer rates in 2020, Deal Activity Down 30-40%