19,000 Accenture jobs cut: Is an MBA still worth it for aspiring consultants?

“Is an MBA worth it?” 

You might have heard of the massive layoffs from major tech giants like Meta and Amazon in the US — but other sectors, such as consultancy, have also started to axe jobs. 

Last month, Bloomberg reported that McKinsey & Co. announced plans to eliminate around 2,000 jobs, while KPMG had cut almost 700 professionals from its US advisory practice. Others, such as EY, are also bringing down their hiring targets by thousands.

Recently, consulting firm Accenture cut 19,000 jobs, accounting for 2.5% of its workforce. 

In its latest quarterly report to the Securities and Exchange Commission, the company said it would continue to hire. Still, it had “initiated actions to streamline [its] operations and transform our non-billable corporate functions to reduce costs.”

The layoff is expected over the next 18 months, making it one of the largest rounds of dismissals in the consultancy sector.

Why is this happening? 

Tom Rodenhauser, managing partner of Kennedy Research Reports, shares that the hiring binge during the pandemic was in light of the various consulting opportunities that “the firms couldn’t give up.” 

Rodenhauser also pointed out that the staff reduction reflects the company’s close ties to the tech industry. 

“Accenture has a dominant position in that sector as a provider, so it’s natural that the largest provider would feel the effects more as the sector slows,” he told Bloomberg. 

Amidst the rising concerns and economic instability, one group of workers has been particularly shortchanged: US immigrants holding H-1B visas for workers with specialist skills.

Is an MBA worth it: How the layoffs are affecting international students 

For international students who found a job in the US, the H-1B visa is a staple work visa which allows US employers to employ foreign workers in speciality occupations. 

These include fields such as architecture, engineering, mathematics, physical sciences, social sciences, medicine and health, education, business, and more. 

According to US Citizenship and Immigration Services, computer-related jobs accounted for nearly 70% of approved H-1B recipients in 2021.

Once you get this work visa, it is valid for three years with the possibility of another three-year extension. That adds up to six years. 

When H-1B visa holders are laid off, they must secure sponsorship from another company within 60 days or leave the country. 

Here’s the catch: you can’t apply for this visa as an employee. Your employer has to file it for you via an online system. 

Knowing how popular the H-1B visa is among international students and foreign workers, this begs the question: is an MBA worth it? 

It is expensive to study for an MBA

Students planning to pursue an MBA should be concerned about forking out a considerable amount of money only to graduate without job security and fear of being laid off — and rightfully so. 

MBA degrees are among the most expensive master’s degrees. According to Education Data Initiative data from Nov. 2022, the cost of an MBA in the US can range from US$30,000 to US$120,000, with the average cost being US$61,800. 

For context, it costs US$112,764 to pursue an MBA (the full two-year programme) from Harvard Business School. 

Meanwhile, a similar two-year programme from Binghamton University costs US$34,940.

Plus, remember the cost of living. 

Harvard estimates that students should prepare approximately US$30,000 a year for their living expenses when they come to the university. 

That figure will vary according to your lifestyle and the city you are studying in. 

How much are MBA graduates getting paid? 

The big three consulting firms (also known as MBB) – McKinsey & Company, Boston Consulting Group (BCG) and Bain & Company pay their MBA graduates exceptionally well, according to Poets and Quants. 

The base average of MBB is US$175,000, approximately 10% increase from last year. Based on the base pay, Bain and McKinsey start at US$192,000, with the Boston Consulting Group (BCG) trailing close behind at US$190,000. 

With the current economic trend and consulting firms going through high overhead costs, will MBA graduates still be able to enjoy such attractive salaries? 

Management Consulted doesn’t believe so. In its analysis, the next wave of cuts will involve either shrinking project team sizes or hiring less expensive non-MBA talent. 

“This growth is not without potential peril. Future margins are at risk as firms continue to raise salaries without a commensurate rise in project rates,” shares the firm. 

“So far, margins have been protected by a decrease in operational costs (i.e., smaller office space, less travel). Still, there is only so much that firms can cut, and salaries keep rising.”

Is an MBA worth it? 

Yes, an MBA is worth it and relevant. Earning an MBA can enhance your career opportunities, increase compensation and lead to better job opportunities.

It’s important, however, that you have the right reasons to pursue an MBA.

Harvard Business Review emphasises that the MBA isn’t a “golden ticket” that will automatically admit you to higher-paying jobs. 

Rachel Beck, managing director of mbaMission, an MBA admissions consulting firm, tells Fortune that she speculates some business schools are predicting an increase in enrollment, especially among recently laid-off tech workers.

“Business schools are already making accommodations – such as extending deadlines and waiving test requirements – aimed at courting people from that sector,” Beck shares. 

What does this mean? Now might be the perfect window for potential MBA students to apply to business schools. 

In fact, the demand for MBAs has decreased in recent years. 

According to a survey conducted by Clear Admit, more than half the respondents of 1,500 young professionals (52.6%) cited that cost was the biggest hurdle.

With lower overall applications, aspiring MBA students can worry less about securing a spot at top business schools. 

“That’s a good thing for the people who are applying in this current admission cycle,” Beck says. “It gives them a little bit more of a chance.”

What’s more, MBA students can expect business schools to go “above and beyond” in helping to secure placements in a bad economy. 

“It’s in their best interest, as schools want the data to show that their grads are finding jobs,” says the mbaMission’s managing director.

So international students, before you decide to invest in an MBA, look at your career goals and the real purpose of pursuing an MBA. 

Then ask yourself: is an MBA worth it?