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Western Asset cuts 10% of workforce

The Pasadena-based money management firm has recorded heavy write-offs related to troubled securities in some of its funds.

March 25, 2009|Tom Petruno

Pasadena-based Western Asset Management cut 10% of its workforce Tuesday, joining the growing list of money managers that have slashed staff to cope with shrinking assets.

Western, the nation's third-biggest manager of bonds and other fixed-income securities, said it cut 100 jobs worldwide, including at its headquarters on Colorado Boulevard.

"Given the current market environment and recent efficiencies achieved by consolidating operating systems, Western Asset has made the difficult decision to right-size its staff to reflect its business needs, like other industry players," the company said in a statement.

Western's parent company, Baltimore-based Legg Mason Inc., has reeled over the last 18 months from poor performance of some of its mutual funds, including its once-high-flying flagship stock fund, Legg Mason Value Trust, managed by Bill Miller.

The company has recorded heavy write-offs related to troubled securities in some of its money market mutual funds. Its flagship bond funds, Western Asset Core Bond and Core Plus Bond, also have stumbled, hurt by some of their holdings of mortgage securities.

Western Asset Core Bond posted a negative total return of 10.8% last year, while rival bond fund Pimco Total Return gained 4.8%.

Legg Mason spokeswoman Mary Athridge said the job cuts at Western didn't include senior portfolio managers. Most of the layoffs were staffers in operations and administration, she said.

Western, which had $513 billion in assets under management at year-end, is expected to vie with Newport Beach-based Pimco, Los Angeles-based Trust Co. of the West and New York-based BlackRock Inc. to be one of the fund managers under the Treasury Department's new private-public partnership program to buy and manage toxic assets from banks.

The company is "very interested in the program," Athridge said.


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