is trimming Waddell & Reed's
] headcount as part of a big cost-cutting effort.
| Hank Hermann|
Waddell & Reed Financial
Chairman, Chief Executive Officer
Yesterday the Overland Park, Kansas-based mutual fund and brokerage shop unveiled
its Q1 2016 earnings, which revealed a 22.5-percent year-over-year drop in AUM to $95.2 billion. The release also highlight "cost cutting initiatives ... intended to reduce fixed operating expenses by approximately 10%, or $40 million."
The Kansas City Business Journal
and the Kansas City Star
both covered the layoffs. The former reports that Waddell first did a voluntary separation program, which ended on April, and then started an involuntary one on April 22.
On Waddell's earnings call yesterday, as revealed in Seeking Alpha's transcript of the call
, Waddell chief financial officer Brent Bloss
offered more information on the cuts.
"We believe at this time that most of the cost will be related to consulting, legal, some of the operational aspects, websites, as well as processing in the field," Bloss said on the call, in response to a question from Jefferies
analyst Daniel Fannon
Fannon, who is also treasurer and senior vice president, added that in Q1 (prior to the latest cost-cutting efforts) "some of the savings came from lower legal costs and advertising costs." And Phil Sanders
, chief investment officer and senior vice president at Waddell, clarified in response to a question from William Blair
analyst Chris Shutler
that the "cost reduction efforts" have only resulted in three departures in Waddell's "80-plus" people in the investing division; "one co-portfolio manager in a product, and then two analysts."
The cost-cutting comes even as Waddell is tweaking
the brand of Ivy Funds to Ivy Investments
], and redoing that subsidiary's logo and website.
Neil Anderson, Managing Editor
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