Of the 130,000 jobs that have been lost at financial services firms since the middle of last year, most have been at banks and brokerage firms. Mutual fund companies, so far, have held up because theyve been buttressed by ongoing fees from customers retirement savings. In 2007, fund companies lost only 1.6% of their workforce, or 2,723 jobs.
But with mutual funds having lost $144 billion in the August through October, a growing number of experts believe job losses in the mutual fund industry could become as large as they were in the bear markets of 2001-2002 and 1991-1992, Reuters reports.
These large corporations in asset management clearly are not seeing business rebounding the way they thought, said Jeanne Branthover, a managing director with Boyden Global Executive Search.
You have to assume that every single firm is going through the same exercise, agreed Henry Higdon, a managing partner with an executive search firm called Higdon Partners. Theres the skin, then the muscle and the bone. Lets just cut off the skin right now and see what happens before seeing if we have to go into the muscle.
The trouble is, Higdon quickly added, Most of these organizations expect things to get worse.
Fidelity announced last week it is laying off 2.9% of its workforce, or 1,300 people. American Century Investments plans to cut 17% of its staff, or 270 jobs. With both Janus and AllianceBernstein experiencing asset declines of about 30%, those companies are also planning job cuts. Janus cut 9% of its workforce, or 115 jobs, late last month, and AllianceBernstein is in the process of paring its staff of 5,600.
According to the Investment Company Institute, the mutual fund industry expanded by 21,000 jobs during the boom years of 2005 to 2007 to reach a total of 168,000.