More layoffs are expected at American Funds this year, although the announcement will not be finalized until June.
Management at the mutual fund giant, which is advised by Capital Research and Management, sent a memo to employees last week stating the firm is anticipating further staffing cuts this year, said Chuck Freadhoff, an American Funds spokesman.
The market is depressed and our assets are down, he said.
The firm laid off 60 employees last fall and another 500 in January, representing nearly 6% of its work force.
The memo also indicated there will be no merit pay increases this year, Mr. Freadhoff said. Management has asked all staff to cut back on expenses, he added.
American Funds Investment Co. had $700 billion in assets under management as of Feb. 28, down from $1.1 trillion in January 2008.
Sue Asci is a reporter at InvestmentNews, a sister publication of Pensions & Investments