They’re cheap, but trainees on ‘rotation’ are engaged in a game of musical chairs. And that’s not a great situation to be in right now.

Back in November 2006, students at universities and business schools had reason to feel lucky. Yes, there were 60 analyst applicants for every place (according to High Fliers Research), but banks were busily hiring for record analyst and associate intakes for the following year.

Fast forward two years, and the fortunate applicants who got junior banking jobs in 2007 don’t look so lucky after all. Business has taken a turn for the worse, and with the likes of Bank of America, Morgan Stanley, Deutsche and HSBC operating rotation programmes in which trainees bounce between desks for anything from three to 12 months at a time, plenty of last year’s entrants are still without fixed positions.

Horrid things may already be happening to the itinerants. Lehman is laying off 5% of its workforce this week, according to CNBC (although this isn't specific to juniors). And last week, US blog site Dealbreaker ran a story claiming Credit Suisse had told first years in its US financial sponsor group to shift into back-office roles outside the US or find new jobs elsewhere.

Although London recruiters deny they’re being hit with a flood of junior CVs, an associate at one US house in Canary Wharf says recent entrants are on shaky ground: “If you’re just out of university you’re more vulnerable to losing your job. You don’t have the relationships or the business acumen and are a waste of £80k.”

Jonathan Knee, senior managing director at Evercore Partners, a former banker at Goldman and Morgan Stanley, and author of the book The Accidental Investment Banker, says rotation programmes are always difficult to navigate, but that this year they may become impossible.

“An already stressful situation is likely to become a lot more stressful – a number of people won’t find any position when rotations end. And many others will end up in a highly inconvenient but more profitable geography, or in an entirely different sector to the one they’d intended.”

Are you an analyst or associate on rotation? Let us know if you’ve been offered/obliged to accept any unappealing positions. Or do you have any advice on how to ensure you get a good spot when the music stops?