It appears that the credit crunch will have an impact on job application patterns and for PhDs looking for jobs.
This is not particularly good news for final year PhD students who are starting to explore various job possibilities. Some friends who were doing quantitative jobs in the London financial sector have been laid off. I have not heard much on how research funding in the UK will be affected but some state universities in the US will not be planning to do any hiring for the next year. The following is an excerpt of an email from a director of a research centre in a US university:
There is, unfortunately, a reality constraint that reflects what has happened during the last couple of days on the financial market. To explain, even before the stock market began its downward plunge, the state was already caught in a serious budgetary crisis reflecting the earlier mortgage and housing situation. (As you may have heard from the news, some people on the state payroll have not been paid since the beginning of July and the state is seeking a huge loan to avoid bankruptcy.) In particular, this budgetary crisis has extended into all of the public sectors within the state…
Lance Fortnow analysed things similarly in a recent entry (Fiscal crisis):
Schools like Northwestern have structured their finances so they can weather short term shocks in the economy but a prolonged recession or depression will start to take its toll. New faculty hiring will likely be the first victim in universities. Tenured professors may delay their retirement after taking a hit in their CREF accounts holding up slots for new hires. Universities worried about their long-term finances may also slow down opening up new positions. On the other hand we should see increased enrollments on every level which may push the need to hire more CS faculty. Computer Science has lost its luster in recent years, but still reliably produces jobs and there is a flight to safe majors in times of economic turmoil. People who have trouble finding a good job often go back and get their Master’s while they wait out the recession. We should also get more people interested in Ph.D.s as alternatives dry up.