PIMCO, the giant investment firm, is cutting jobs.
The firm is cutting 68 jobs, according to an internal memo that just went out. We’ll update this story as we get more information.
In the meantime, here’s the memo:
Earlier today the Executive Committee directed a series of steps to ensure that our business is better structured to serve our clients in this fast-changing asset management industry landscape. We want to share this news with you now that we have connected with our colleagues who are affected.
As a primary step, we have taken the difficult decision to reduce our headcount by 68 people. We have always strived to hire top talent, so those who are now leaving are colleagues who have given tremendously to PIMCO and our clients. We pride ourselves on being a lean organisation with a special culture, so that only makes this decision even more difficult and personal for us as a firm. While this reduction represents just 3 per cent of our workforce, the changes are especially painful given the close bonds that all of us forge with one another as colleagues and friends. We thank all those who are leaving for their many contributions and we will miss them.
Secondly, we will be offering voluntary severance to eligible employees in the US. Those eligible will be contacted later today by HR. Separation terms will be determined by reference to local custom and regulations.
Finally, we have decided to restructure our active Dividend strategies by converting the equity exposure to Research Affiliates Equity Income (RAE Income). While our Dividend team colleagues have made important contributions to the firm, we believe this conversion is a better outcome for clients as we seek consistent performance with a lower risk profile, while delivering on the objectives of high current yield and long-term capital appreciation. As a result, the dividend team will be among our colleagues referenced above who are leaving the firm.
Here is why we are taking these measures: We remain committed to first caring for the assets that clients have entrusted to us. We also see growth potential in a range of areas including alternatives, private credit, solutions, client analytics, and regionally in many parts of the world, not to mention the increasing investor demand for many of our non-traditional strategies. We know that the role of active management has never been more important to client portfolios. The competitive demands of this industry require that we continually adapt and innovate to meet evolving client needs. Therefore, everything we do is focused on providing investment performance, innovative solutions for clients and outstanding client service.
Of note, as we collectively move forward as a firm, we will continue to build out teams and hire the best talent globally and manage our staff levels through attrition, hiring, repositioning of resources and through promotion and compensation. We have undertaken an extensive benchmarking exercise this year to compare our compensation with competitors and will use this to remain a top payer in our industry.
Taking these actions today positions all of us for the future. We will use our substantial resources to invest in you and add to our already remarkable talent where necessary.
Today is a difficult day for all of us at PIMCO, but most importantly, for those affected by these decisions. The firm is providing support to those affected and we thank them again for their contributions.
We thank you all for your continued commitment to our clients and the firm as we move forward.
Dan, Doug and Jay