Pimco plans to cut about 3 percent of global workforce: memo

Thu Jun 16, 2016 4:21pm EDT
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By Jennifer Ablan

NEW YORK (Reuters) - Pacific Investment Management Co plans to cut about 3 percent of its workforce in the wake of a drop in assets under management since the 2014 departure of co-founder Bill Gross, according to an internal document obtained by Reuters Thursday.

“Like any responsible business, Pimco constantly adjusts its resources to capitalize on changing markets and investment opportunities for clients,” Pimco spokesman Michael Reid said in an email statement. “Our current business plans will reduce expenses in some areas while, of course, ensuring investment and hiring in others.”

The memo said headcount will be reduced by 68 people at the Newport Beach, California-based company, which had about 2,300 employees at the end of the first quarter. That was down from 2,400 a year earlier.

The memo also said Pimco is eliminating six dividend-income strategy funds, which are led by a team including money manager Brad Kinkelaar and have about $260 million in assets.

Pimco's assets stood at $1.5 trillion as of March 31, down from a peak of about $2 trillion in the first quarter of 2013. Gross, who co-founded the firm in 1971, left abruptly in 2014.

Pimco built its reputation largely through its management of fixed-income assets, but in recent years it has tried to diversify its investor base to include those buying equity products.

It even tapped former Goldman Sachs banker Neel Kashkari, who ran the U.S. government's $700 billion Troubled Asset Relief Program and is now president of the Minneapolis Federal Reserve Bank, to direct an expansion into new markets, including stocks.

In 2015, Pimco's then-global equities chief investment officer, Virginie Maisonneuve, left after less than a year and a half in the position, as the company began narrowing its equities investing focus.   Continued...

The offices of Pacific Investment Management Co (PIMCO) are shown in Newport Beach, California August 4, 2015. REUTERS/Mike Blake