US - Baltimore-based asset manager Legg Mason has confirmed there will be no more job cuts on the back of its acquisition of Citigroup Asset Management and the Permal Group, which has already seen the company axe 410 employees.
“The company’s number of employees fell by 410, or 10%, during the seven months since the transaction closing, reflecting the continued integration process,” Legg Mason said in its second quarter report. “The planned reductions in the employee base related to the integration are now complete.”
In Q2 of 2006, Legg Mason’s assets under management fell by 1.5%, from US$868bn to $855bn. This was mainly due to $7bn in net client cash outflows.
Equity assets also decreased by $13bn as the overall equity market declined.
“This was a difficult quarter,” said Raymond “Chip” Mason, CEO, Legg Mason. The company registered a 1.3% decrease in revenues over Q2, when compared with the first three months of 2006.
Legg Mason cited a decline in performance fees by $30m over the quarter for the revenue slide. The decreased value of equity assets and lower levels of liquidity assets also dampened revenues.
Mason said the company made some cost savings over the course of the Citigroup and Permal transactions which led to an increase in total operating revenues which were up to $1.04bn from $437.7m last year.
Legg Mason also registered a increase in net income, which rose by 38% to $156m.
The firm reshuffled it organisational structure in late June, dividing its operations into three units - global managed investments, international asset management and US asset management.
The new structure reflected the integration and strategic rationalisation of the businesses acquired through its transaction with Citigroup in June 2005 which saw it swap its securities brokerage and capital markets business for Citigroup Asset Management.
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