PIMCO's announcement this month that it is making a 3% cut in its headcount is only the latest, and most public, move in a continuing reduction.
Jennifer Spivey, vice president for corporate communications, said in an e-mail that the firm had 2,299 employees on its payroll as of June 15, down 4.1% from the end of 2015.
That drop does not include personnel affected by the June 16 layoff announcement, including eliminating the entire eight-person dividend investment team.
Ms. Spivey said the earlier reductions of 98 employees had been through attrition. She added that the firm had also hired people in 2016 but didn't provide specifics.
Michael Reid, PIMCO's global head of corporate communications, later clarified that the 98-person reduction earlier in the year also included seven people who had been laid off in PIMCO's product management group.
The staff reductions at Pacific Investment Management Co. LLC come as the firm has seen its assets under management decline more than 25% in the past three years — to $1.498 trillion as of March 31, from $2.044 trillion as of March 31, 2013, data from eVestment, Marietta, Ga., show.
A confluence of events — including performance problems in the firm's flagship strategy, the PIMCO Total Return Fund, where outflows began in mid-2013 — contributed to the AUM decline. The performance issues helped spark turmoil at the firm, which saw the departure of PIMCO CEO and Co-Chief Investment Officer Mohamed El-Erian and PIMCO co-founder and Chief Investment Officer William Gross, fueling further outflows.
And while the outflows seem to be stabilizing as of late, staff reductions at the Newport Beach, Calif., money manager aren't over.
In addition to the layoffs announced this month, PIMCO officials also said they would be offering a voluntary severance package to some U.S.-based employees, but they did not specify to how many employees it would be offered. The decline in assets under management is making the cuts necessary.
“If your assets under management fall 25%, you can't have the same staffing,” said Janie Kass, San Francisco-based managing director at money management consulting firm Margolis/Kass Advisors. “You'll wait a certain amount of time, and then at some point — sooner or later — you'll have to cut some staff.”