PARIS -- The MBA graduates who are hitting the street this month in Europe face one of the toughest job markets in years.

The consulting and financial services industries -- which hired aggressively in recent years -- are in a profound slump and have cut back dramatically on recruiting, say executives, graduating students and placement specialists. Some industrial companies, particularly in the pharmaceutical and auto sectors, continue to hire despite the economic slowdown. Still, the result is a moribund job market.

"We had heard before we started the recruitment process that the outlook was not very good," says Muna Sukhtian, who started Insead's one-year program last January and graduated in December. "After Sept. 11 it only got worse. It was really unimaginable how bad it could be."

Some 430 Insead graduates hit the job market in December 2001 -- the biggest class at the Fontainebleau-based school. Likewise, the International Institute for Management Development, or IMD, in Lausanne, Switzerland in December turned out 2001's class of 81 MBA graduates.

What they're finding isn't pretty. Many consulting firms made the rounds of campus recruiting sessions only to announce they were hiring few or no people. With venture capital dried up, joining a start-up is nearly out of the question. And competition is fierce for jobs at industrial companies that are hiring.

Moreover, graduates sometimes are competing with experienced rivals laid off by companies as they cut costs. All of this bodes ill for the big crop of MBA graduates in June, when economists figure the global economy may still be limping along.

The signs of a slumping job market are everywhere. Only about 85 companies came to Insead's campus near Paris to recruit last fall, half the number that came a year earlier. The proportion of graduates with job offers is likely to be below the approximately 50% seen by the class that finished last summer. At IMD, where graduates tend to be older, with an average of seven years of experience, about 80% had jobs as of December, down from more than 90% a year earlier.

Students "know that times are tough," says Julianne Jammers, director of marketing and career services at IMD. "There is not the breadth of choice that there was in previous years."

To help fill this year's jobs gap, Insead took the unusual step of e-mailing 8,000 alumni who graduated as long as 30 years ago to ask if they knew of any available jobs. About 800 responded and the result was 200 job listings -- some of them for temporary posts.

Ms. Sukhtian, who is Jordanian, counts herself among the lucky ones. She landed a consulting job at Booz-Allen & Hamilton Inc.'s office in Beirut, Lebanon. But she said three years of consulting experience with Arthur D. Little Inc. in Boston and Jordan, plus a clear focus on finding work in the Middle East, meant she had an easier time than many classmates. Many of them, she said, were gunning for consulting or investment banking jobs in major European capitals.

"Everybody wants to work for a consulting company in London," says Ms. Sukhtian. "But that's not the right place to be looking right now."

Indeed, consulting companies have been hard hit by the global downturn and the wave of uncertainty that followed September's terrorist attacks as their clients put projects on hold. Although less hard hit than their U.S. counterparts, where even powerhouses like McKinsey & Co. have laid off large numbers of support staff, European offices have dialed back dramatically on recruiting.

"We're hiring just the three-star candidates," says Pierre Rodocanachi, the director of Booz-Allen's Paris office. "It is a very limited number of people."

Booz-Allen will hire between 100 and 200 people in Europe this year, less than half the figure in earlier years, said Mr. Rodocanachi. In earlier years the company had enough turnover and growth that it needed to hire the equivalent of 15% to 20% of its staff to keep pace. This year that will drop to 8% to 10%, he said.

Industrial companies, the wallflowers of recruiting fairs during the go-go years of the 1990s, suddenly find they're sought after. Drug maker Eli Lilly & Co., for example, was flooded with nearly 100 unsolicited student applications after officials made a presentation at Insead on Sept. 18. That was double the number the year earlier. The company is using the changed atmosphere as an opportunity to hire talented graduates. Veronica Cecchi, head of European recruiting, says the company planned to hire more MBAs in 2001 than it did in 2000.

"[In 2001] we had more opportunity to choose people because of the situation with banks and consultants," she says. "We got more attention than we ever had before."

Ms. Cecchi's main worry now, she says, is identifying candidates who really want to pursue a career in industry.

So far, the weak job market doesn't seem to have translated into lower pay. Executives and recruiting specialists say there is still plenty of competition for top talent, which has propped up salaries.

"The average salary was about $100,000 last year," said IMD's Ms. Jammers, who tracks starting pay for graduates. "What's come in so far is about that or a little bit better, which kind of surprised me, frankly."