BMO fired all of its Houston Bankers (~60 people)

Just saw on Instagram that BMO let go of all of its Houston-based bankers (~60 people) today. 

https://www.instagram.com/stories/litquidity/2454…

https://www.instagram.com/stories/litquidity/2454…

Makes me worried about my career. Will be joining a top 5 group in Houston as a summer analyst this summer. If anyone knows more, would be happy to hear about it. 

More discussion here:

BMO Energy Cuts

Follow-Up on BMO Layoffs: Can You Go Wrong with Technology IB?

Comments (141)

 
  • Intern in IB - Ind
Nov 30, 2020 - 9:48pm

Also curious to hear if the sentiment within HOU offices is bear amongst analysts and associates and if people are navigating an exit out of energy.

 
  • Analyst 1 in IB - Gen
Nov 30, 2020 - 10:10pm

Can you spill the beans on the metals and mining group, I've heard it's next-level toxic but nobody's every specified why or how 

 
  • Analyst 1 in IB - Gen
Nov 30, 2020 - 11:45pm

Consistently ranked the best mining group in the world but MDs are psychopaths which leads to a tougher work environment. Lot's of the MDs like to create 80 page decks for M&A and pitches which involves a ton of random analysis that you're going to be up till 4AM doing every other week. Although after going through that, the juniors come out with a much stronger skill set compared to other groups at different banks.

 
  • Intern in IB - Gen
Dec 2, 2020 - 12:46am

Don't know a ton about the consumer group at BMO but they only sit in the Chicago office, not the New York office. Since BMO recruits by office you need to make sure to target the Chicago office. That said they are one of the better groups but they worked their interns pretty hard this summer.

 
  • Intern in IB-M&A
Nov 30, 2020 - 10:22pm

What kind of company does internal/employee restructuring like this?

Consulting firms? Another investment bank? Or just BMO's leadership

 
Nov 30, 2020 - 10:37pm

Every company in corporate America does this. My old company fired 100 people in our accounting shared services org in an afternoon to move the jobs abroad. If you can save money or the business unit isn't driving the returns you want you sell it or shut it down. This is not a unique thing to BMO. Now how they handled it appears to be poorly done. Don't do it a week before bonuses and during the holidays. Give them a month notice so they can sharpen their resumes, but I digress.

 
  • Associate 2 in IB - Gen
Nov 30, 2020 - 10:29pm

I'd doubt other banks will initiate mass layoffs a week before bonus, especially after a stressful covid environment

 
Dec 1, 2020 - 12:01am

With the way O&G is I'm surprised it took this long.  If I had to guess TD should be next in Houston along with other smaller players.

 
  • Intern in IB - Ind
Dec 1, 2020 - 12:03am

can't speak to HOU but their Toronto metals and mining team has a reputation of being a sweatshop, Guys constantly stay until 3am.

when I was recruiting summer, I asked an alum at BMO for a mock and the guy scheduled the mock for 1:30 AM cause he didn't have time off. 

 
  • Analyst 1 in IB - Gen
Dec 1, 2020 - 8:43pm

This is true. Toronto metals & mining is as sweaty as they get but good deal flow. One of the analysts quit after 6 months of joining without having a job lined up cuz he had to work 4am back to backs for weeks on end.

 
Dec 1, 2020 - 11:00am

I'll say this, they were doing well enough to recruit for FT pre vaccine announcement. Multiple guys said it was one of their better years and that natural gas was strong even if oil was weak. If they got cut with all this I'd be trying to dodge Houston Energy IB.

 
Dec 1, 2020 - 1:04pm

I interviewed too, they went on the freeze because they were deciding about this axe, they were up on deal flow compared to the past few years. BMO was doing zero hiring for Chicago and one spot in NYC. Considering these guys had been approved for a FT hiring process they had to have been doing fine

 
  • Associate 1 in IB - Gen
Dec 1, 2020 - 11:19am

Really tough to see.

My thoughts: sure, BMO wasn't a top dog in Houston, but that isn't the issue. Nobody is saying Citi or Barclays or JPM is going to pull one of these and totally shut down. What is does demonstrate though, is that the ladder to climb is narrowing. If you are starting post-MBA at a top shop, that's great, but the reality is a fraction of your class will make VP and there are fewer seats at other firms to move to within the space. BMO had associates/VPs+ from top tier shops--what do they do now?

The top BBs are likely not expanding and will hold steady at best with fewer promotions, and that is a really tough environment to be building your career in.

 

 
  • Associate 1 in IB - Gen
Dec 1, 2020 - 12:29pm

Would be one thing if a return to "normal" was high activity. Pre-Covid dealflow was heavily subdued and the capital markets were dead long before that. A 30%+ WTI increase brings us back to a mediocre enrivonment at best.

 
  • Analyst 1 in IB-M&A
Dec 1, 2020 - 1:37pm

Don't ever think for a second that your company gives a fuck about you. Milk as much as you can from your employer and by that I mean more than money. Learn as much as you can, form good relationships with your peers, etc. so that if you get fired you leave with some savings AND skills and a network 

 
  • Associate 3 in IB - Gen
Dec 1, 2020 - 5:29pm

tell that to the other guy in the thread who said he'd hand over his terminally ill mother with months to live to a caretaker because he didn't want to sacrifice his career.

 
  • Analyst 1 in IB - Ind
Dec 1, 2020 - 3:12pm

This is scary - getting to OP's real question though - is all of Houston IBD in danger now? Are smaller IBD cities like Chicago going to follow suite.... this is a bad sign 

 
  • Associate 1 in IB - Gen
Dec 1, 2020 - 3:59pm

My take is that not all of HOU is in danger of an office shutdown, but even the top firms are going to be lower activity and likely to limit promotions or downsize where possible.

Depressed deal flow, at lower valuations = fewer fees to go around. If you are married to O&G/Hou that's fine, but if you have options, take an objective look at the career ladder ahead.

 
  • Associate 1 in IB - Gen
Dec 1, 2020 - 6:48pm

On that note, BMO had people who joined from GS, MS, Citi, etc.

The reason this should scare you if you're at one of those "top" shops is that if that door upward is blocked (which it will be for many), the other options are looking fewer and fewer. That is frightening.

 
Dec 1, 2020 - 8:21pm

They just posted a hiring for IB Analyst in Healthcare out of NYC per LinkedIn. So if that's your group, you guys got that going for you, which is nice.

Few players recall big pots they have won, strange as it seems, but every player can remember with remarkable accuracy the outstanding tough beats of his career.
 
  • Intern in IB - Gen
Dec 2, 2020 - 12:49am

That's because everyone on the healthcare group either leaves banking entirely or laterals as soon as they can. 

 
  • Analyst 3+ in IB - Gen
Dec 2, 2020 - 1:31am

BMO healthcare known for being really sweaty? I know must HC groups tend to grind/have a lot of dealflow so I wouldn't be surprised.

 
Dec 2, 2020 - 2:41pm

BMO is resource sector heavy. They're usually near the top of M&A in Canada, but the slump in energy and slowness in mining has really hurt them in 2020. Houston bankers are much more expensive than those in Calgary. Canadian ASOs make $120k CAD base. Makes sense they would axe significantly in Houston but I know deal flow in Calgary is sour right now as well. 

KC
  • 2
 
  • Analyst 1 in IB - Gen
Dec 3, 2020 - 1:46am

What's your source on this? Ive heard associates at bmo mining (and other reputable groups in Canada) in Toronto clear $350k+ CAD regularly

 
Dec 3, 2020 - 9:12am

That's base salary. No one's making a 200% bonus when times aren't good. What's the USD equivalent and compare that to what ASOs make the US. Easy executive decision.

KC
 
  • Analyst 1 in IB - Ind
Dec 2, 2020 - 6:01pm

What happens to people's outstanding PE gigs in this type of event? Do they let you go too?

 

Would probably take everything outta me not to burn down both firms if that was me lol

 
Dec 4, 2020 - 11:41am

It's time to face it.... Energy, specifically in the HY side and low IG rated names at risk of becoming fallen angels, is becoming un-investable.  Sure you can trade it around but the core investor base (long only, insurance, "real money", etc.) is starting to realize renewable, batteries, electric, etc. cost curves are are coming down fast to price parity.  The ESG (fad?) has become a buzzword mainly for marketing, but that doesn't make it irrelevant.  That makes the sector un-bankable, especially oil.  The fixed income and credit markets are the life blood of corporate activity and if that market is closed then the equity market is irrelevant.  

If you want a comparison, look at the coal industry.  Yes 1 or maybe 2 companies can access debt markets. But they still struggle and the investor base is tiny. 

Energy is significantly bigger than coal but that also makes it more devastating.  It will move into insignificance eventually, but will be faster than most expect.

 

I am aware that my response is not addressing what other teams are at risk of being fired in Houston in the near future. Maybe someone here has the inside track to senior level decisions that aren't yet leaking within or outside the company.  Though I highly doubt anyone here has access to that info.  But what you can do is step back and assess what's happening at a more macro level and infer the direction of things.  Usually humans are unable to grasp how quickly change can happen.

 

As a junior banker, get experience and keep what I said in mind.  Put a few years on you resume and transition into other things.  When opportunities present themselves, evaluate and make a move if it makes sense (not too soon so you dont look like you bounce around the street).

 
Dec 4, 2020 - 2:18pm

Today must be bonus day for the Canadian banks? 
 

wonder how the non energy BMO guys did from bonus perspectivve. 

Array
 
Dec 4, 2020 - 3:53pm

it will boom and bust. but the booms will be smaller and smaller (already are) and the busts will keep happening.  zoom out and take a look.  the trend is down.... hard.  stay in denial if you'd like. oil and gas is going down a lot, not to zero.  But it doesnt have to for the industry to be irrelevant.

 
  • Associate 3 in IB - Gen
Dec 4, 2020 - 4:52pm

This reminds me so much of when I worked in Calgary in 2015-16 and all the industry people were like 'We'VE seEn tHIs All beFOre, it's CYLICAL'.  And yet, here we are 6 years later, with oil struggling to stay above 40 bucks.  This prolonged downturn is not cyclical, it's largely secular, because the bust was not driven by demand factors - it was supply, which will continue to remain plentiful and demand will crest and start to wane over the longer-term.  I left Calgary in 2017 and never worked in energy again.

 
Dec 5, 2020 - 3:28am

Someone in Houston correct me if I'm wrong, but feel like the O&G/energy scene is controlled by guys like JEF/EVR/CS/GS/TPH/SIM etc. Point being a smaller pool of players relative to other industries. So those not included in that pool are being squeezed out

  • 1
 
  • Intern in IB-M&A
Dec 5, 2020 - 6:22am

I don't think Simmons is as big anymore, and I would add Citi and Barclays to that list but yes. I agree with the view. There's gonna be fewer fees going around and the smaller offices will downsize a lot or just shut shop.

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