Franklin Resources Lays Off 3% of Staff amid Client Redemptions
Franklin Resources Inc., a $1.6 trillion money manager, is laying off approximately 3% of its workforce following substantial client redemptions from its Western Asset Management Co. (Wamco) unit. Since late August, Wamco has witnessed $120 billion in withdrawals.
The layoffs encompass various departments and regions, as confirmed by a company spokesperson in an emailed statement on Tuesday. Franklin Resources employs over 10,000 individuals, indicating that approximately 300 employees will be impacted by these measures.
"To continue investing in our long-term growth initiatives and evolve for the future, we need to find savings and remain focused on our effectiveness and efficiencies," stated Jeaneen Terrio, a spokesperson for the company.
Last week, Franklin Resources announced plans to reduce expenses by $200 million to $250 million in its 2026 fiscal year, while integrating a significant portion of Wamco into the parent organization.
Wamco, formerly a formidable bond manager, has faced scrutiny since last year following revelations of an enforcement investigation into former star trader Ken Leech. The client withdrawals have cast a shadow over the company, which aims to expand its alternative and private investing operations.
"Looking forward, you could think of our company in a much more simplistic way," said Matt Nicholls, Chief Financial Officer of Franklin Resources. "On the public market side, we're going to have one scaled operation supporting a series of investment teams," he explained, adding that "the second part of the company is the alternative-asset businesses that require very specialized operations to support them."
In November, US prosecutors charged Leech with "cherry-picking" favorable trades for certain clients at the expense of others. He was released on $10 million bail and pleaded not guilty to fraud charges in a Manhattan court the following month.