Following the financial crisis a drastic reduction in assets has resulted in firing of 47 workers which includes 12 portfolio managers by Putnam Investments, a US asset manager. Putnam said it was in the process of merging its stock funds numbering six.
Since Putnam’s chief executive Robert Reynolds took charge in July, this is one of the most significant changes in the company with the job cuts amounting to at least two percent of the company’s work force.
A host of other asset managers are cutting jobs too following Putnam’s footsteps following the pulling out of huge amount of money by investors from mutual funds and stocks. The impact of the financial crisis is felt by these companies which depend on the revenue generated from percentage of assets and fees.
Putnam’s top stock funds have performed badly making it very difficult for the company which saw its assets falling by 38 percent this year. Assets fell to $116 billion in October from $186 billion in February. The year 2000 saw the company’s assets at $371 billion.
In a conference call with reporters, Reynolds said job cuts were all from the investment group of Putnam. Out of 26 researchers in the team, only 9 will remain now.
Money management will now shift to individuals from being team based. Performance of the individuals will determine compensation according to sources from the company.
Putnam is also changing the way it manages money by shifting from a team-based approach in stock funds to giving individual managers full responsibility. Compensation is being more closely aligned with performance, Putnam said.
