Harvard Management Co., which oversees the $29 billion endowment fund at Harvard University, Cambridge, Mass., will shed roughly 25% of its staff over the next few months, spokesman John Longbrake confirmed.
Industry sources, who declined to be named, said layoffs at HMC began last week, with investment professionals among those leaving.
According to a statement from Harvard Management, targeted reductions will occur throughout the Harvard Management Company and will include some investment professionals, as well as "back-office' and other support personnel operations, IT, human resources and legal.
The announcement comes two months after Drew Faust, Harvard University's president, revealed that the value of Harvard's endowment the biggest in the nation plunged at least 22% to about $29 billion in the first four months of the current fiscal year that began July 1. The fund had $36.9 billion at the close of the previous fiscal year.
Harvard Management has more than 200 people in its downtown Boston office, according to the money manager's website.
The statement said Harvard Management' s new management team, headed by Jane Mendillo, has launched a series of steps to rebalance and re-engineer the organization.
People familiar with the company, who declined to be named, said Ms. Mendillo called staff to the company's trading floor the morning of Feb. 5 and announced the pending changes and layoffs. They said more than 50 employees were either laid off immediately or told that their jobs would be eliminated by the end of March.
Ms. Mendillo didn't return calls seeking comment.
The sources said the layoffs shouldn't be seen as a sign that Harvard Management is considering reducing the amount of money it manages in-house for Harvard. More than half of the endowment's assets are managed by outside firms.
The changes are the latest in a period of dramatic flux for HMC in recent years, following a long stretch of stability and investment success under Jack Meyer, who led the company for more than 15 years through 2005, when he and Harvard Management's star fixed-income managers left to form hedge fund firm Convexity Capital Management.
In 2006, Harvard Management brought in Mohamed El-Erian from Pacific Investment Management Co.; less than two years later, Mr. El-Erian returned to PIMCO, where he is now chief executive officer and co-chief investment officer.
Ms. Mendillo joined HMC on July 1 from Wellesley College, Wellesley, Mass., where she was CIO for its $1 billion endowment fund.