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Lazard's Asset Management Arm Mulls to Lay Off 60 Employees

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Lazard (LAZ - Free Report) is likely to layoff about 7% or more than 60 employees in its asset management division, affecting both investment and non-investment roles. The unit also plans to shut down certain investment funds by the end of the year. The news was first reported by the Wall Street Journal.

The decision comes post an internal review conducted by Ashish Bhutani, unit’s chief executive, into the unit’s performance, which has been lately affected by change in investor preference to lower cost passive funds.

The company intends to keep expenses controlled so as to continue investing in opportunities such as platform improvements and technology that might help it expand and improve efficiency. Also, it intends to focus more on quantitative, environmental, social and governance issues.

Of late, a number of companies have undertaken cost-saving measures as performance has been affected slightly by persistent geopolitical concerns.

Recently, Charles Schwab (SCHW - Free Report) was in news for plans to reduce headcount by about 600 employees from its offices nationwide in a bid to support bottom line, which it expects to be affected by the Federal Reserve’s decision to cut rates.

Also, State Street (STT - Free Report) has slashed roughly 250 jobs in information technology unit. This is part of the company’s cost-saving efforts, wherein it plans to eliminate high cost location headcount by 2,300 in aggregate by the end of 2019.

Finally, continuing with its cost-cutting efforts to enhance operating efficiency amid challenging market conditions, HSBC Holdings (HSBC - Free Report) mulls to reduce almost 4,000 jobs globally, which accounts for nearly 2% of its workforce.

Our Take

Lazard’s efforts to grow assets under management through several investment strategies are expected to aid top-line expansion. Also, focus on cost savings is likely to enhance profitability. However, dependence on local and global economic conditions for revenue generation and regulatory pressure can impede top-line growth of the company.

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