By Gary McWilliams and David French
HOUSTON/NEW YORK (Reuters) - Jefferies Financial Group has laid off 15 people in its energy investment banking team, as the bank reacts to a slowdown of mergers and acquisitions activity among oil and gas companies, sources familiar with the matter said on Friday.
The job cuts were concentrated within the group that focuses on sales of acreage and smaller assets, known in the industry as the Acquisitions and Divestitures (A&D) team, and were predominantly junior staff helping with technical roles, according to three of the sources.
Jefferies declined to comment. The sources all spoke on condition of anonymity as the information isn't public.
Dealflow involving oil and gas exploration and production companies has slumped this year to its lowest level in a decade, excluding the large acquisition by Occidental Petroleum Corp (NYSE:OXY) of Anadarko Petroleum Corp (NYSE:APC).
The slowdown comes as shareholders, unhappy with years of substandard returns from their investments in oil and gas, have pushed companies to eschew growth and focus on developing existing positions, and cost cutting - all aimed at boosting the amount of cash given back to investors.
This has left investment bankers tasked with advising on such transactions without sufficient work.
Jefferies has one of the largest energy investment banking teams in the United States, meaning the layoffs reflected a small percentage of its overall energy investment banking team, according to one of the sources.
The bank ranks second and third in league tables for oil and gas M&A transactions by volume and value, respectively, according to Refinitiv data.
Earlier this month, Wells Fargo (NYSE:WFC) & Co laid off 13 people, or 7% of its energy investment bank in Houston - a story first reported by Bloomberg News.
Add a Comment
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.