A bunch of old Citigroup asset managers will soon be without jobs when their funds are folded into Legg Mason funds. After Legg Mason and Citigroup closed their asset swap deal on Dec. 1, Legg announced in a regulatory filing with the SEC that it plans to cut some of the employees that came with the swap. That means some Legg managers are suddenly going to have a lot more assets to manage in their funds.
“If it were a small company, asset growth [in the funds] would be a worry, but these guys are pros and can handle this readily,” says mutual fund industry analyst Stephen Winks. “From a sales and marketing standpoint, it's a brilliant move to focus on a smaller number of funds. They're going to make this into one of the most extraordinary money management companies, period.”
Legg Mason has already begun letting people go and will complete the layoffs over the next year, paying $30 million in benefits, the company said in its filing. A MarketWatch report said Legg would cut 300 to 400 Citigroup jobs, citing a source close to the agreement. A Legg Mason spokesman declined to comment on the report or on how many of Citigroup's funds would be folded into Legg Mason funds.