Deutsche sets round of cuts

December 5, 2001 Posted: 1231 GMT

NEW YORK (CNN/Money) -- Deutsche Bank is expected to cut 1,500 employees – including about 400 analysts, portfolio managers, and traders -- as part of its purchase of Zurich Scudder Investments, according to a published report Wednesday.

The move is unusual as investment professional are rarely asked to leave firms in such large numbers. In recent cutbacks at other firms, such as Fidelity Investments, Janus Capital, and T. Rowe Price, phone representatives and support staff comprised most of the cuts, according to the Wall Street Journal.

"This is going to represent real cost savings," Dean Barr, global chief investment officer with Deutsche Asset Management, told the paper. "We're serious about doing something thoughtful."

In addition to market declines, Scudder mutual funds have lost about $2.3 billion due to client withdrawals in the first nine months of 2001, leaving it with $105.3 billion in fund assets. Likewise, Deutsche has lost $3.8 billion over the same period, leaving it with assets of $47.5 billion in the United States, the paper reported.

Portfolio managers are facing increasing pressure at fund companies as stocks are heading for a second consecutive year of declines, and some smaller firms are starting to cut higher profile employees.

Munder Capital Management of Birmingham, Mich., let four portfolio managers go in its latest round of cuts, Founders Asset Management of Denver recently showed two managers with declining funds the door, and Putnam Investments asked several managers to leave the company in its latest round of cuts, according to the Journal.

The 1,500 cuts come on top of a previously announced plan to eliminate 3,300 jobs over two years at Deutsche's asset management and private client unit, most of these coming in Germany, the paper reported.

Deutsche Bank agreed to acquire Zurich Scudder in September for $2.5 billion.