Life As We Know It...

From the Kansas City Business Journal:

Waddell & Reed offers early buyouts, may make further job cuts

Feeling the pinch from the stock market’s free fall, Waddell & Reed Financial Inc. has started cutting employees.

Spokesman Roger Hoadley said Monday that the Overland Park-based company (NYSE: WDR) plans to cut 15 percent of its compensation costs. He said the company started offering a voluntary separation package Friday, with enhanced severance incentives tied to job grade and tenure. The voluntary separation offer expires Dec. 4, he said.

“Depending on the result of this voluntary separation program, we’ll look at other alternatives, including the need for involuntary separation,” Hoadley said.

Waddell & Reed CEO Hank Herrmann said in an internal memo to employees on Thursday that the cuts are due to a “swift and violent” decline in stock and bond prices. Most of the company’s revenue comes from fees based on assets under management, Herrmann said, so the company needs to reduce expenses to be more in line with revenue.

Waddell & Reed started the year with $70 billion in assets under management. That has declined to less than $45 billion, Herrmann said in the memo.

“I know that the timing of this announcement, given the approach of the holidays, could not be worse,” Herrmann wrote to employees. “Like you, I wish we were not in this situation. The severity of the market and economic downturn and their impact on us leave us no choice but to take decisive action now, to reduce expenses.”

Hoadley said the company does not plan to cut financial advisers.

Waddell & Reed has 1,030 employees in the Kansas City area and 1,673 overall.

Yup, I'm one of those 1,030 employees.