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I accepted an internship offer from Company A. Then I got an invitation for final round interview with a company I had a first-round interview with long back then, let say company B.

Company A does not give many return offers while company B does.  But I haven't prepared for interview in a while, so I think I might not do well for the interview with company B.

If I do bad for the final round interview,  will it leave a bad impression if I want to apply for full time later?

Option 1: Should I still have interview with company B?

Option 2: Should I let company B know that I accepted an offer and hope they will consider me for full time position later?

I don't want to break trust. So I am more inclined to Option 2. But now given the massive layoffs, I am not sure what is the best practice to do.
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I think you can withhold the info for the post interview followup. Who knows maybe they will give you a better offer?
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Are you asking if you get rejected for a job today, will you still have a chance at getting a job offer from that same company in the future?

Without knowing the specific company, yes, this is possible, and actually quite common at big tech companies. I’ve heard recruiters from Facebook/Google and the like say that on average, their employees had to interview with them 2-3x before getting an offer. Which means their average employee got 1-2x rejections from them.

Some companies even have you on a schedule. I interviewed with Facebook many years ago, got rejected. And then like clockwork, six months later, I got a message from a recruiter asking if I wanted to interview again.
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On the HR side:

For large tech firms, record of your interview performance is held for 6 months, along with notes from hiring manager and HR. After 6 months, that information is removed.

There were rare instances where the hiring managers remembering specific candidates who were absolutely terrible in their interviews that they know them by name.

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Hiring POV:

There's no guarantee that either company will provide return offers - it's a mix of  hiring manager, economic circumstance, and your own personal performance. At this stage, maximizing your opportunities is worthwhile to see which internship will be the most fulfilling for you. So do the interview anyway. In addition, you should utilize any internship as an opportunity to network internally to create the circumstance that can increase your return back offer.

Do not tell Company B that you accepted an internship offer. They'll immediately reject you given internships have large queues of candidates if candidate #1 is unavailable. However, if you leave to Company B from Company A, it'll definitely burn bridges for Company A given they had to say sorry to many of the candidates they interviewed. Depending on the recruiter and hiring manager, this may stay in company record for a while.
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