Energy IB - Layoffs at Jefferies, TPH, and Simmons?

Prospect in IB-M&A

Hi monkeys,

I'm an incoming SA at a BB in their energy (Houston) group and I recently read an article about Jefferies firing 15 junior bankers and also heard today that Simmons fired some analysts as well (heard something about TPH also) and I'm curious to hear what people have to say about the future outlook of energy IB for BBs and EBs.

Thanks in advance.

Region: 
United States - South

Comments (12)

Oct 8, 2019

I heard from someone in the industry that Jefferies laid off a handful of Associates, so I can corroborate that rumor.

    • 1
Oct 9, 2019

The article just said "15 people". Where did you get the "junior banker" part from?

Layoffs usually do not start at the junior analyst level, but rather along the lines of VPs and even underperforming MDs. I'd say unless Jefferies pulls a DB'18 (unlikely) you're probably fine.

Actually from what I recall, isn't Jefferies suing Cantor for poaching too many of its Energy bankers lol

Array

    • 1
Oct 9, 2019

The cantor situation is for the power group in NY, not oil and gas.

A handful of Associates in the E&P group were canned, plus some junior A&D folks.

Other banks are not far behind, capital markets issuances are at a 10 year low and down 90% year over year in verticals like midstream. So those levered to equity and high yield issuances are exposed

Oct 9, 2019

Is this reflective of IB as a whole or more for Energy/O&G given the state of the industry? Article seems unclear

Oct 12, 2019

I work as a consultant in energy & infrastructure. Haven't heard of anything that's as big as an industry problem.

Oct 9, 2019

.

Oct 10, 2019

Simmons did not lay off any analysts. One associate and the rest more senior. Pls fix. Thx.

    • 5
Oct 10, 2019

Heard the same, don't know why ppl have assumed it's all analysts.

Most Helpful
Oct 17, 2019

Know there was blood-letting last week. Not on that side anymore so not totally sure how many and what levels. Would assume, like has already been said, that they happened likely at the VP/Director level, as customary. Can confirm that the "harvest" wasn't wholly performance based, visa-vis banks aren't confident deal flow in E&P will improve anytime soon. A&D is at a complete standstill until there's investor appetite for upstream IPO's (which, IMO, won't be anytime soon; maybe in 3-5 years, maybe). So many blockbuster acreage acquisitions during the last land-boom have been duds; underwriting assumptions for those deals have been way off: well performance, tangible inventory, drill & complete costs, reservoir quality, and even PDP forecasts have across the board have fallen short. Buy-side isn't giving upside inventory credit at face value anymore until the sector collectively starts figuring out a way to generate FCF consistently and despite lower price enviroments.

    • 5
  • Prospect in IB-M&A
Mar 10, 2020

More layoffs could come since the oil price is very low now?

Mar 11, 2020

Simmons and some of the other MMs probably have to downsize.

  • Analyst 1 in IB-M&A
Mar 11, 2020
Comment