Franklin Resources is dismissing about 3% of its staff as the $1.6 trillion money manager consolidates operations, after clients of its Western Asset Management Co. unit redeemed $120 billion since late August.
The cuts were made across multiple departments and regions, a spokesperson for the San Mateo, California-based money manager said Feb. 4 in an emailed statement. The company has more 10,000 employees, according to its website, suggesting about 300 people will be affected by the move.
Investment professionals were not affected by the cuts, a statement from the company said.
“To continue to invest in our long-term growth initiatives and evolve for the future, we need to find savings and remain focused on our effectiveness and efficiencies,” said the spokesperson, Jeaneen Terrio.
The company said last week that it plans to enter its 2026 fiscal year with the equivalent of $200 million to $250 million of expense reductions and is integrating much of WAMCO into the parent firm. WAMCO — which was a giant of bond management for decades — has been under siege since last year when it revealed that former star bond trader Ken Leech was under an enforcement investigation.
The client withdrawals have put a cloud over the company, which has been seeking to bulk up its alternative and private investing businesses. WAMCO still contributes about 6% of Franklin’s revenue, Chief Financial Officer Matt Nicholls told analysts last week.
“Looking forward, you could think of our company in a much more simplistic way,” Nicholls said after Franklin reported earnings for the most recent quarter. “On the public market side, we’re going to have one scaled operation supporting a series of investment teams,” he added, and “the second part of the company is the alternative-asset businesses that require very specialized operations to support them.”
U.S. prosecutors charged Leech in November, accusing him of “cherry-picking” favorable trades for certain clients at the expense of others. He was granted $10 million bail and pleaded not guilty to fraud in a Manhattan court the following month.
