HL Recent Layoff

Former analyst here. Can confirm the layoffs across HL per peers that are still at the firm (and personally know a few that were laid off). The ironic thing about HL is that they will go onto college campuses to recruit eager students and say the following: (1) the firm grows during downturns and it is the safest place to be for job security during a recession (idea being that while M&A slows down restructuring revenues pick up and M&A analysts can potentially work cross-laterally on distressed M&A deals), (2) the firm proudly displays its “#1 in M&A in the U.S.” trophy for all to see (#1 in annual number of transactions), (3) strong culture and "friendly" bankers, and (4) HL is one of the most active investment banks when it comes to selling companies to sponsors and HL will connect you with these buyside firms after your analyst stint. These are attractive considerations when it comes to choosing a place to work 80+ hours a week for 2-3 years. So, like many, I drank the Kool-Aid. To address the current state of HL from an analyst's perspective (in the same order as the list above): (1) HL has let go a number of M&A analysts (seems to be mostly second-year analysts who would normally be entering into a third year, but quite a few first-years as well). HL gave many of these analysts little to no notice prior to letting them go (the lucky ones got a month or two notice). (2) #1 in M&A in number of annual transactions... most of the M&A deals HL works on are minimum fee ($1.5M) meaning the deal is under $100M. The infamous revenue-per-head metric at the firm has caused senior bankers to chase any deal with a fee attached to it (e.g. I was staffed on four live deals at once with an aggregate transaction amount of ~$250M). The ranking is not all that HL makes it seem to be. (3) My experience, albeit one perspective, was that the understaffings (due to the revenue-per-head metric) caused a toxic work environment and created a lot of churn at the analyst level. (4) The analyst rotation is three years, and HL has asked analysts to avoid recruiting for any buyside opportunities until after your first year. The firm wants analysts to remain on board for the three-year program and then offers to help M&A analysts connect with buyside firms of interest. I want to emphasize that the firm is not supportive (at least quite a few offices) of analysts recruiting for buyside jobs early on during the analyst cycle. Many analysts that recruit must do so in secret. During two of my super days (cough “sick-days”) with upper MM PE firms, I was working in 10-minute spurts between interviews. Another issue with this model is the fact that analysts who honored HL’s request to not recruit (with the hope / promise to be connected with PE firms later on in the analyst cycle) were completely burned once COVID hit. Recruiting froze and HL laid off many of those same analysts who they asked to not recruit for buyside jobs. And, to nobody’s surprise, did not connect those analysts with PE firms.

You will get a technical work experience at the firm, but it comes at a cost. The firm boasts about its “resilient business model” during downturns (see Bloomberg’s “Houlihan Lokey is the Investment Bank Built or Hard Times” in May 2020) but reality is that it is affected just like every other firm. Revenues are much lower than anticipated. Analysts are getting let go (or informally letting go / not granting a third year to many quality second-year analysts). Bonuses slashed. Doesn’t seem too resilient or secure at the moment. Just my perspective…