Janus Capital Group, the publicly traded mutual fund firm, is the latest buy-side institution to announce mass job cuts as the stock-market swoon shrinks assets under management.
Within its third-quarter earnings release last Thursday, Janus said it plans to cut its workforce by about 9 percent. Janus had 1,213 full-time employees at the end of 2007.
"In light of the challenging environment, Janus is focused on aligning our expenses with our revenues," Chief Executive Gary Black said in the announcement. "While we're cutting overall compensation, reducing headcount and scaling back spending, we're also moving forward with our strategic plan."
A Janus spokesman told Financial News that no portfolio managers or analysts would be cut, but the reductions would affect all other areas of the business. They are expected to take place this month.
In its earnings release, Janus noted that global financial markets fell 20 - 30 percent through September and were down another 20 percent during October, "The continuing deterioration in market conditions and Janus' average assets under management will place pressure on its operating margin and results in the fourth quarter 2008 and into 2009. To align the company's cost structure with the current level of assets under management and revenues, Janus anticipates reducing 2009 fixed and discretionary costs by approximately $40 million to $45 million."
The expected cost savings will come from reducing the workforce approximately 9 percent and cutting general and administrative expenses by $25 million - $30 million. Janus estimated it will incur about $7 million in severance costs in this year's fourth quarter.
Janus reported third-quarter net income from continuing operations of $26.0 million, or 16 cents per diluted share, compared with $50.8 million, or 29 cents per diluted share, a year earlier.