BlackRock, Capital Group, Fidelity, and Putnam are the latest firms to cut jobs.
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The global market turmoil is taking its toll on the U.S. mutual fund industry, forcing more firms to lay off employees.
BlackRock plans to cut jobs through the end of this year. Although the firm has yet to disclose the total number of expected layoffs, it has already let go roughly a dozen investment personnel. The list includes Linda Zhang, comanager of BlackRock Asset Allocation
American Funds' parent Capital Group Companies will continue to reduce its staff in the coming weeks. The firm has already eliminated 60 support staffers in its Global Institutional Group in Europe, divided between the London and Geneva offices. The GIG investment management team has not been affected. Capital Group spokesman Chuck Freadhoff says that "as assets under management have declined, the support structure that you build for a larger asset base is no longer needed." He said shareholders of the American Funds, which operate in a separate division of Capital Group, will not be affected.
Fidelity Investments recently announced its second round of layoffs. It is planning to cut roughly 1,400 jobs in the first three months of 2009, which will bring the total number to 3,000, or roughly 7% of its work force. The firm has suffered in the last year, as its equity offerings, including flagship Fidelity Magellan
Fidelity's Boston neighbor, Putnam Investments, announced on Monday that it is cutting 47 jobs, including 12 portfolio-management positions. These departures have less to do with cost-cutting than with revamping its struggling equity lineup, though. Previously, almost every equity fund at Putnam was team-managed with quantitative and fundamental managers aboard. New CEO Bob Reynolds says he wants to move to a single-manager format so that there's "individual accountability and responsibility of the funds." He also wants to shift the emphasis away from quantitative research and toward fundamental analysis, which is why almost all the fund managers let go had quant backgrounds.
Putnam departures include Jeanne Mockard and Geoffrey Kelley of George Putnam Fund of Boston
Putnam also plans to roll the following six funds into larger, cheaper siblings with similar investment styles in the next 30 to 60 days (shareholder approval wasn't required): Putnam Classic Equity will merge into Putnam Fund for Growth & Income