About 120 lose jobs at Legg

12 in Baltimore laid off

most cuts at Calif. division

March 25, 2009|By Hanah Cho | Hanah Cho,hanah.cho@baltsun.com

Baltimore money manager Legg Mason Inc. laid off 20 employees, including 12 people at its Light Street headquarters, while its largest division cut about 100 jobs in response to continuing market volatility and its struggling financial performance.

Western Asset Management Co., based in Pasadena, Calif., a division that focuses on fixed-income funds, made the "difficult decision to right-size its staff to reflect its business needs, like other industry players," spokeswoman Mary Athridge said in a statement Tuesday.

Job cuts affected 10 percent of employees across Western, which has offices in New York, London and Tokyo, among others.

"This will not have an effect on our ability to manage money and serve our clients," Athridge said, adding that Western is also making "strategic hires," most recently three credit analysts.

Western oversaw $513 billion in bond and money-market funds as of Dec. 31, 2008. It has recently struggled with client redemptions and money-market funds invested in toxic securities.

Athridge said Western is looking into the federal government's proposal to team with private investors to buy mortgage-backed securities and other toxic assets that are hurting banks.

On the corporate level, job cuts affected employees in the areas of mutual fund administration, Legg said. Eight employees worked in New York, while the rest were based in Baltimore.

"While we do not anticipate across-the-board reductions in force, we are looking at each part of our operations strategically and will make changes consistent with our business requirements," Athridge said.

The job cuts are the latest for Legg, which cut about 8 percent of its back-office work force, or about 200 people, in December. About 99 employees in the Baltimore region were affected.

Other asset managers also have trimmed their work forces to deal with deteriorating market conditions and investors withdrawing their money.

Legg expects to exceed $135 million in savings through various cost-cutting measures, including the job cuts.

Legg Chairman and Chief Executive Officer Mark R. Fetting said this month that the company expects to make more cuts as market challenges continue.

Legg's money-management subsidiaries are making decisions about job cuts and other measures independently.

In late October, Baltimore-based Legg Mason Capital Management, run by money manager Bill Miller, cut a third of its 147-person staff.

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