Legg Mason Inc., in trying to merge its operations with the money management arm of Citigroup Inc. as part of the biggest deal in the company's history, has begun to lay off Citigroup employees, offering them severance payments totaling about $30 million.
Legg Mason revealed the layoffs in a filing with the Securities and Exchange Commission this week after closing the $3.7 billion deal in which the Baltimore firm swapped its brokerage business for the Citigroup divisions that manage about $400 billion for clients. Legg Mason doubled its assets under management with the acquisition.
Mark R. Fetting, a senior vice president at Legg Mason who heads up mutual funds, said at a symposium in New York on Thursday that layoffs were necessary because some job duties overlapped. He declined to say how many employees would lose their jobs. Before the deal was announced in June, Citigroup Asset Management employed about 2,500 people, mostly in New York.
Legg Mason started notifying employees and presenting severance packages in recent days. Fetting said Legg Mason officials had committed to quickly informing Citigroup employees of their fate as soon as the deal closed. "We've had a hard couple of days this week," he said.
Also this week, Legg Mason said that Peter J. Wilby, one of Citigroup's best bond fund managers, would not be joining the company. Wilby may help form a new firm in New York.