Pimco has eliminated 68 people and is handing over management of some of its equity assets to another firm as part of a cost-cutting plan, according to an internal memo sent on June 16.
The majority of the staff affected were in operations, technology and client-facing roles, a person familiar with the matter said. The firm, according to the memo, will trim some of its equity funds and partner with Newport Beach-based Research Affiliates, on the management of some stock portfolios.
Pimco also is offering voluntary severance to other US employees. The cuts amount to 3% of Pimco’s roughly 2,300 employees. The firm managed $ 1.5 trillion in assets at the end of March.
Fox Business Network first reported the layoffs.
“Like any responsible business, Pimco constantly adjusts its resources to capitalise on changing markets and investment opportunities for clients,” a spokesman said. He added that the plan would cut costs in some areas and allow for investments and new hires in other parts of the business. He confirmed the contents of the memo.
Pimco is looking to expand in private credit, alternatives and client analytics, the memo said.
A spokesman for Research Affiliates declined to comment.
As part of the equity changes, Pimco will close six funds with about $ 260 million in assets. That amount represents less than 1% of the firm’s stock assets under management, the spokesman said. The head of Pimco’s dividend team, Brad Kinkelaar, will leave the firm as part of those changes.
Pimco in 2014 made a push into equities but has since closed some funds and several leaders in the business have departed. It currently manages about $ 40 billion.
The firm has suffered investor withdrawals in recent years following several leadership changes at the firm. Co-founder Bill Gross abruptly left in September 2014 and investors have pulled billions from the flagship fund he managed.
Firms that have long focused on active management have also been under pressure from growing investor taste for passive funds that track the performance of indexes.
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This article was published by The Wall Street Journal