Banks Trim Summer Analyst Classes by 5-10%

The competition for investment banking internships has reached unprecedented levels, with acceptance rates at top firms falling below 1% for the 2026 season. Goldman Sachs reportedly saw over 250,000 applications for just 2,900 summer positions, an acceptance rate of 1.16%, which is lower than NASA's astronaut program. This surge in applications is partly fueled by AI tools that enable students to apply for numerous jobs across different sectors. Productivity gains from new AI tools are a key driver behind the leaner intern classes. Banks are deploying generative AI to automate tasks that traditionally consumed thousands of junior banker hours. For example, Goldman Sachs uses a proprietary tool that can draft pitchbooks in minutes instead of days, while Morgan Stanley has an AI assistant for its financial advisors, freeing up human capital for more strategic work. This trend isn't uniform across Wall Street. Bulge bracket banks, with their massive scale and structured training programs, are better positioned to leverage AI for efficiency gains in large analyst classes. In contrast, elite boutique firms often feature leaner deal teams and a more hands-on, mentorship-driven culture where analysts get broader exposure to transactions from the start. While the M&A market has seen a pickup, activity is concentrated in larger, more complex transactions, often with an AI theme. This has intensified the demand for experienced mid-level bankers, with elite firms preferring to poach proven talent from direct competitors rather than training up larger classes of junior talent from scratch. The nature of the junior banker role itself is evolving due to automation. With less time spent on manual data collection and presentation formatting, there's a growing emphasis on higher-value skills like strategic analysis and client interaction earlier in a banker's career. This shift may lead banks to recruit for different qualities than they have traditionally prioritized. Despite the smaller intern classes, some forecasts suggest overall graduate hiring by investment banks in the UK for 2026 is expected to increase. This indicates that firms are still wary of creating future "talent gaps" and recognize the need to maintain a pipeline for associate and VP roles, even as they automate entry-level tasks.