Web Exclusive: Companies begin rescinding job offers to college graduates

Tribune Media Service

Graduating students entering the job market this year are learning an early lesson about the world of work: Nothing is guaranteed.

In the face of a swift economic downturn that has caused many companies to lay off workers, some employers, like Cisco Systems, are rescinding job offers they made months ago to students. Others are postponing the start dates for new hires or, like Intel, are dangling buyouts to persuade new graduates not to show up for work. And Agilent Technologies is including new hires in an austerity program that will cut all salaries by 10 percent for at least a few months.

The companies are also taking pains to make the affected students feel they have been treated fairly, since they know bad feelings now could lead to problems recruiting in future years.

Cisco, which is laying off thousands of workers, has told about 70 or 80 students — just under 10 percent of its college hires — that it won’t have jobs for them after all. These students will receive 12 weeks’ pay and assistance finding other jobs.

Lance Choy, assistant director of the Stanford Career Development Center, said several companies that recruit on campus have told him they are rescinding job offers. The companies are offering compensation ranging from several thousand dollars in cash to, in the case of one foreign student, help from an immigration attorney.

Other companies are trying different strategies. Intel, which is trying to cut about 5,000 jobs this year through mostly voluntary departures, has offered some of the students it had promised to hire this summer incentives not to show up. The compensation generally includes two months’ pay plus the student’s sign-on bonus, said Tracy Koon, director of corporate affairs for the company. Students who are offered the program can choose to come to work anyway, but they may end up in a different job than the one they signed up for.

Agilent is lowering salaries, at least temporarily.

The pay cut will apply to Emily Granada, who accepted an offer from Agilent in February and is scheduled to start her human resources job in June after finishing her MBA at the University of California at Berkeley. She learned about it one day last month, when she heard on the news that Agilent was cutting all employees’ salaries by 10 percent for one or two quarters.

“The day after, I got a phone call from my future manager, which I really appreciated,” Granada said. “I was definitely relieved that I still had the offer.”

Charles Schwab, which has announced layoffs, has postponed the date some of its new graduates were going to start special training programs. A group that was preparing to start in April won’t begin until later this year, said spokeswoman Sarah Bulgatz.

Students aren’t the only ones affected, but they are more likely than other workers to have their offers changed or withdrawn. That’s because there’s often a lag between when students accept their offers and when they start work.

Observers of college recruiting say that although relatively few students are seeing their offers rescinded, the practice is not a new strategy for struggling companies.

“That’s a reality in the workplace,” said Andy Ceperley, director of the career center at Santa Clara University. “There are times through history where employers have pulled out.”

The companies that are struggling with how to handle the college recruits they no longer need are trying to minimize damage to their reputations.

Some of the severance packages for students who have never worked for a company are comparable to what established workers at some companies receive. One reason is that companies want to make sure that next time they need to hire college students, the students will take their offers seriously.

“Word of mouth is huge among students,” Choy said. “Students come back, they tell their friends, “This is how they treated me.’ That makes a huge difference.”

Granada said that even though she’ll be starting at Agilent earning less money than she anticipated, the experience confirmed her good impression of her future employer.

“They had the option of laying off people or taking back offers,” she said.