Credit Suisse Group will cut roughly 300 jobs from its U.S. asset management division before the end of the year. Certain traditional equity and fixed-income strategies have operated on an unprofitable business model, prompting cutbacks in these areas, Renato Fassbind, Credit Suisse CFO, said in an earnings conference call this morning.
The cuts will reduce Credit Suisse's U.S. asset management headcount by 40% to roughly 450 employees, said spokeswoman Suzanne Fleming. She declined to identify specific individuals who will be affected. Short-duration cash, high-yield fixed income, emerging market equity, international equity and alternative investments strategies will be unaffected by the realignment, Ms. Fleming added. Credit Suisse will focus on these strategies, as well as enhanced index and quantitative strategies, and structured products.
Company officials began a strategic review of the business in March, led by David Blumer, who became CEO of global asset management in January. At that time, Credit Suisse was restructured to make investment banking, private banking and asset management work more closely together. This initiative resulted in a vast re-evaluation of the U.S. business, company officials said in the conference call.
The U.S. asset management business ran $114.5 billion as of June 30. Over the last year, Credit Suisse also added alternative investment assets from its investment bank and short-duration cash assets to the U.S. money management operation. Prior to these integrations, the firm managed $25.6 billion as of March 31, 2005, down 31% from March 31, 2004. Over this same period, the U.S. operation's employee headcount dropped by 25%.