Legg Mason Inc. is cutting 8 percent of its corporate work force, or about 200 people, as the Baltimore money manager reduces costs to help offset a volatile market and its poor financial performance, executives said yesterday.
About 99 employees at Legg's Light Street headquarters and Owings Mills office will be affected in the Baltimore region, with the remaining workers coming from offices mostly in the U.S., including Stamford, Conn., San Francisco and New York.
Legg has about 4,200 employees worldwide, including 1,000 workers in the Baltimore area. Executives said the job cuts took place immediately.
In a memo to employees late Thursday, Legg Chief Executive Officer Mark R. Fetting said the company "made the very difficult decision to implement reductions in staff across Legg Mason, an unfortunate but necessary step in achieving sustainable cost savings in a period of unprecedented market turmoil."
The job cuts affect workers in business operations who perform corporate functions and provide support to investment affiliates, such as legal, finance, technology, marketing and fund administration.
"Next week will feel different at Legg Mason," Fetting added. "But we must stay clearly focused on the business at hand and committed to performing at the highest level."
Legg's work force reduction comes at a difficult time for the mutual fund industry, which has been watching the value of its assets crater in a recession. In turn, spooked investors have been pulling record amounts from their mutual funds and other investments.
Competitors such as Fidelity Investments, AllianceBernstein and Janus Capital Group also have announced job cuts in recent months in response to dire market conditions. Fidelity, for instance, is cutting 3,000 workers by the end of March.
Legg's assets under management fell nearly 9 percent to $841.9 billion at the end of September, from $922.8 billion in June. While the decline was mostly due to market losses, Legg clients pulled $20 billion from its funds in the July-September quarter.
Besides market losses, Legg has also been hurt by exposure to troubled asset-backed securities in some of its money market funds. Costs to protect its money funds against potential losses have weighed down its profit.
Legg's stock has dropped nearly 75 percent since the beginning of the year. Shares gained $1.70, or 10.3 percent, to close at $18.15 yesterday.
