PIMCO is laying off 68 employees as part of moves that include eliminating the dividend team and closing the six mutual funds they manage, the company disclosed in an internal memo obtained by Pensions & Investments.
In addition to the 68 employees who are being laid off, PIMCO said it would offer voluntary severance to eligible employees in the U.S.
The changes are the latest retrenchment by PIMCO. In May 2015, the firm closed two active equity strategies. As a result of those changes, Virginie Maisonneuve, who had been hired just a year and half earlier to lead PIMCO's foray into active equities, resigned.
Fixed-income oriented Pacific Investment Management Co., one of the world's largest global money managers, had struggled with net outflows since the departure of co-founder and Chief Investment Officer William H. Gross in September 2014.
In the memo, signed by PIMCO President Jay Jacobs, CEO Douglas Hodge and CIO Daniel Ivascyn, the three said the employee reductions are occurring “to ensure that our business is better structured to serve our clients in this fast-changing asset management industry landscape.”
PIMCO says the layoffs amount to about 3% of its total workforce of 2,300 but did not say how many U.S. employees will be eligible for voluntary severance that it will be offering. The memo says eligible employees will be contacted by human resources on Thursday.
Analysts who follow PIMCO's parent company, Allianz SA in Munich, Germany, have said in the past that the manager might not be able to sustain its full workforce if net outflows were to continue.
PIMCO's total assets under management were $1.5 trillion as of March 31, down from $2 trillion three years ago.
The memo says the entire dividend team will be eliminated. The largest fund managed by the team, the $493 million U.S. version of the PIMCO Dividend and Income Builder Fund, will be transferred to another asset management firm, Research Affiliates, the memo says.
Two other smaller funds will also be transferred to Research Affiliates. In addition, six mutual funds of dividend strategies with assets of $260 million will be closed, PIMCO said.
Brad Kinkelaar, a portfolio manager who leads the dividend team, will be among those departing.
The memo says that PIMCO will continue to expand investment teams but also notes that staff levels will also be managed through attrition and repositioning of resources.
PIMCO spokeswoman Agnes Crane did not reply to a request for comment.
