- Big banks are cutting junior investment-banking hires as deal volumes stay weak and AI automates analyst work.
- Private equity is recruiting graduates earlier and more aggressively, boosting pay and sometimes offering carry to secure talent.
- AI is shrinking routine entry-level roles while increasing demand for technical, data, and AI-governance skills across finance.
- Business schools and students are pivoting toward broader paths including private equity, quant/fintech, risk, and compliance.
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The current landscape for finance graduates has shifted. Traditional large banks are cutting back on junior hiring as investment banking deal flow stagnates and AI begins to perform work traditionally done by junior analysts. For example, Bank of America eliminated 150 junior roles in its investment banking division in early 2025—both as part of performance reviews and because of low deal volumes. This contraction is reinforced by expectations from Bloomberg Intelligence that entry-level roles could be reduced by as much as two-thirds, especially in the most senior financial hubs. This points toward a structural decline in junior banker headcounts as AI scales up.
In contrast, private equity firms are aggressively recruiting, moving up their timelines and targeting graduates before they have entered investment banks or just out of university. They are also offering competitive compensation packages, especially at junior levels and associate‐paths, sometimes including carried interest even for early roles. This has created a battleground for top talent and forced banks to push back with policies that penalize early departures and future‐dated offers to maintain their pipeline.
AI is one of the key accelerants of this transition. Banks are not only cutting traditional junior roles but also reallocating budgets toward building AI, data engineering, platform engineering, and AI governance teams. AI’s disruption affects not just junior analyst tasks but also back and middle office roles. Routine modelling, drafting, and data processing are increasingly managed by AI, with human oversight and judgment becoming more prized in remaining roles.
The ripple effect on business education is clear. Schools such as MIT Sloan have expanded advanced coursework in AI and data science to better align with evolving recruiter preferences. Graduates are also declining traditional analyst paths in favor of roles in private equity, quantitative finance, fintech, ESG, risk, or compliance. Placement geographies are shifting: fewer graduates stay in regions with weak capital markets while others increasingly accept roles in global financial hubs.
Strategically, investment banks face a double challenge: defending their talent pipelines and adjusting their cost structures in a world where junior analyst work is devalued by AI. Private markets, meanwhile, stand to gain as compelling destinations. For graduates, the risk is misalignment if they pursue paths tied to analyst roles without preparing for alternate skillsets. Open questions remain around the pace of AI adoption, how regulators will respond to changing hiring norms (e.g. termination policies, early offers), and whether compensation in shrinking bank junior roles will compress or shift toward more senior AI-adjacent work.
Supporting Notes
- Bank of America cut 150 junior investment banking jobs in early 2025 amid weak deal volumes; some affected staff were redeployed.
- Reputedly, Goldman Sachs accepts fewer than 1% of the ~875,000 applicants it receives annually in graduate hiring.
- Private equity firms such as Apollo, KKR, and TPG are offering roles to undergraduates and recent graduates, sometimes years before these candidates formally enter the workforce.
- Senior banking executives and analysts report that AI could eliminate many entry-level positions, potentially reducing junior hiring by up to two-thirds over time.
- AI-specialized roles in banks (model development, platform engineering, project management) grew ~13% over six months; product-manager roles in AI grew ~42%.
- Private equity junior roles saw higher salary growth in 2024 and firms are boosting compensation to attract and retain key early-career talent including offering carried interest at associate levels.
- Business schools like MIT Sloan added advanced AI, machine learning, and data science coursework specifically to prepare students for specialized roles beyond traditional banking tracks.