Putnam Cuts 47 Employees And Consolidates Funds

November 17, 2008 3:57 PM EST

As the market has deteriorated and stocks have fallen to historic lows, Putnam has responded by cutting 47 employees and consolidating funds. During 2008, Putnam's assets under management have fallen by 39%. Putnam is the latest to make cuts, following actions taken by Fidelity Investments and Janus Capital .

Putnam layoffs will amount to 2% of its 2,500 employees and it will merge six funds into larger ones at Putnam. These are the biggest changes to occur at Putnam since CEO Robert Reynolds took over in July. Reynolds said that Putnam was moving too slowing in this difficult bear market.

Reynolds told Bloomberg, "It became clear to me was that we had too many people in the decision-making process. The whole goal here is to enhance investment results for our clients. A lack of ownership really hindered Putnam in doing what we are supposed to be doing, which is delivering results for our clients.''

Some of the funds that will be merged include, Putnam Capital Appreciation, Putnam Classic Equity and Putnam Discovery Growth.

Putnum will also change the bonus structure, where managers whose portfolios return in the top quarter of their peer group eligible for full bonuses, while those in the bottom group receiving no bonus.

Putnam recorded third-quarter net outflows of $13.3 billion and contributed a net loss of $22 million to Great-West's earnings, the Winnipeg-based insurer said October 30th. A year earlier, Putnam contributed profit of $15 million.

Stocks Mentioned

Related Entities

• Janus Capital
• Putnam Investments
• Fidelity Investments

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