By Jennifer Ablan
NEW YORK (Reuters) – Pacific Investment Management Co plans to cut nearly three percent of its workforce as assets under management have fallen since the September 2014 departure of co-founder Bill Gross, a source familiar with the situation said on Thursday.
“Like any responsible business, Pimco constantly adjusts its resources to capitalize on changing markets and investment opportunities for clients,” Pimco spokesman Michael Reid said in an email. “Our current business plans will reduce expenses in some areas while, of course, ensuring investment and hiring in others.”
He did not provide details on the number jobs being cut at the firm.
Pimco’s assets stood at $1.5 trillion as of March 31, down from a peak of about $2 trillion in the first quarter of 2013.
Gross, who co-founded the firm in 1971, left abruptly in 2014. Pimco reported about 2,300 total employees at the end of the first quarter, down from 2,400 a year earlier.
Todd Rosenbluth, director of ETF & Mutual Fund Research at S&P Global Market Intelligence, said asset managers with a significant base of business from active funds are facing challenges from the trend toward passive ETFs.
“While collectively fixed-income mutual funds continue to gather new money, Pimco’s funds have experienced significant outflows in 2015 and the redemptions have continued in 2016,” Rosenbluth said.
According to Thomson Reuters Lipper data, Pimco had $11.5 billion of outflows in the first five months of this year across a variety of strategies, he noted.
“The firm’s Total Return, Low Duration, All Asset All Authority, Unconstrained, Real Return Asset and Emerging Local Bond were among the various portfolios with 2016 outflows,” Rosenbluth added.
(Reporting By Jennifer Ablan; Editing by Tom Brown and Cynthia Osterman)