Legg Mason expects to incur a total of $20 million in severance and other costs in this and the next quarter, according to a regulatory document filed with the SEC on Wednesday.
Expenses are in connection with several initiatives, including closing down or reorganizing certain businesses and increasing the efficiency of its global distribution and corporate operations, in each of the quarters ended Sept. 30 and Dec. 31.
Legg Mason expects to realize about $2.5 million in net increases in pretax earnings per quarter beginning with the quarter ending March 31, which is the fourth quarter of the company's fiscal year 2014. These earnings include reduced costs and the elimination of losses at closed or reorganized businesses based on the losses incurred by the businesses in the quarter ended June 30.
The reorganization includes closing Legg Mason's emerging markets equity unit, Esemplia, and transitioning the client-services business in Canada to the firm's affiliates, according to Mary Athridge, a spokeswoman for Legg Mason.