(Bloomberg) -- Legg Mason Inc. is cutting 120 people, or about 12% of staff, and streamlining its executive committee just days after adding investor Nelson Peltz to its board.
The cost-cutting steps are “critical to our ongoing growth,” Joseph Sullivan, chief executive officer of the Baltimore-based asset manager, said in a memo to staff Thursday.
Asset managers have taken aim at their employee ranks as they face unprecedented pressure on fees and substantial investments in technology. In recent months, BlackRock Inc., State Street Corp. and AQR Capital Management have announced staff reductions. Legg Mason announced reorganization plans in February, including unspecified job cuts.
At Legg Mason, almost 100 of the cuts will be staff in the U.S., according to Mary Athridge, a company spokeswoman. The rest will come from offices in Europe and Asia.
The executive committee reporting to Sullivan will be consolidated from eight to four members: Terry Johnson, who will oversee marketing and distribution; Patty Lattin, head of human resources and facilities; Tom Merchant, general counsel and head of risk management; and Pete Nachtwey, chief financial officer. Departing executives include Fran Cashman, Tom Hoops, John Kenney and Ursula Schliessler.
Peltz and two other representatives of his Trian Fund Management will join Legg Mason’s board after the $10 billion New York-based hedge fund acquired a 4.5% stake, the company announced Tuesday.
Peltz said then that he had three top priorities: “significantly reducing costs, driving revenue growth organically and through acquisition, and increasing profitability.”
The investor previously served on Legg Mason’s board from 2009 to 2014, when Sullivan was named as CEO and the firm went on an acquisition spree. Legg Mason is also adding two more independent board members as it expands the number of directors to 12 from 10.
Legg Mason fell 0.6% to $36.90 Thursday in New York, before the job cuts were announced. The shares have gained almost 45% this year, after losing 37% in 2018.
(Updates with Peltz statement earlier this week in third from last paragraph.)
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