Following reports of workforce cutbacks earlier this week by Putnam Investments of Boston and Charles Schwab Corporation of San Francisco, American Skandia of Shelton, Conn. announced today that it is also reducing its workforce.
American Skandia is eliminating approximately 150 positions, about 13 percent of the companys workforce, according to the announcement. The positions eliminated are from a variety of segments of the company, but the product development, new technology development, and sales units will not be affected, according to Timothy Klahs, a spokesperson for American Skandia.
The recent declining market is the reason for the cutbacks, which are part of an overall expense reduction program to better align [the companys] operating infrastructure with the current investment environment, according to the announcement. In addition to the cutbacks, the company will reduce employee compensation and benefit programs and limit certain discretionary expenses such as travel and entertainment costs, according to the company. The company estimates the plan to produce annual cost savings of over $35 million.
The prolonged duration and severity of the market pullback, along with the difficulty in predicting the timing of its culmination, have led us to these hard decisions, said Wade Dokken, Chief Executive Officer of American Skandia. While we certainly are not alone amongst prominent companies in our industry reducing their workforces, eliminating positions that are held by valued members of the American Skandia team is a disheartening process. It is, however, an essential part of the operating discipline necessary to successfully weather the current harsh climate.