Russell Investments is re-evaluating much of its business as the global economic crisis continues to put pressure on the company’s revenues. A message to employees Wednesday said the troubles could mean layoffs in 2009.
The Tacoma-based financial services company sent a memo to employees saying that it’s looking at its costs to see where changes need to be made. Those changes could include reducing the number of people who work at Russell.
The memo didn’t give details, including how many employees might be affected and what jobs might be eliminated, according to Russell employees who read it. Russell employs about 2,000 associates worldwide, with more than 1,100 in downtown Tacoma.
Jennifer Tice, spokeswoman for Russell, confirmed Thursday that the memo had been issued, but wouldn’t provide a copy to The News Tribune.
“The global financial crisis continues to put the financial services industry under unprecedented pressure,” Tice wrote in an e-mail. “Russell, like so many others in our industry, has reduced its revenue projections for 2009 based on current market conditions. As a result, we are recalibrating our cost structure to reflect this.”
The U.S. economy has been hit with falling corporate profits and home prices, rising unemployment and a credit crisis. All of that is pushing down U.S. and international stock markets. Stock indexes, including all in the Russell index family, have fallen in the last year. The Russell 2000, an index of smaller companies, has fallen 51 percent since the end of 2007, hitting its low Thursday at 385.31.
Russell provides financial services including the management of assets for institutional investors and pension funds. Its business is tied to the global stock markets.
The company told its employees Wednesday that Russell is embarking on what it calls “a comprehensive productivity review.” The review is expected to take awhile.
“We are just at the beginning of this process and it will be a number of months before we have further specifics to communicate,” Tice said.
Russell is the largest private employer in the downtown Tacoma core. It has been the subject of much debate this year. Russell executives said at the end of 2007 that the company was looking to relocate its headquarters. The number of employees was growing rapidly and the company occupied office space in three buildings besides its headquarters on A Street. Tacoma business and civic leaders lobbied hard to keep the company in Tacoma. At the same time, cities including Federal Way tried to lure Russell away.
But the company said in October that it would delay until 2009 a decision about moving. Recent developments in the Puget Sound-area real estate market have caused new opportunities to emerge, the company said, and it needed more time to evaluate those options.
The company won’t discuss its relocation plans and there’s no word whether the financial issues it faces are affecting those plans. Russell also lost some long-time executives this year and is dealing with some losses in its funds.
CEO Craig Ueland and Kelly Haughton, strategic director of global indexes, both left the company. Chairman Mike Phillips will retire at the end of this year after nearly 30 years with the company.
Financial News Online reported this week that four other executives left – including Noel Lamb, chief investment officer for North America, and Mark Amberson, head of money market funds. Their departures follow a $764 million loss in Russell’s money market fund, Financial News reported.
Earlier this year, a hedge fund operated by the company closed after its assets shrank to less than $2 billion from $6 billion, according to The Wall Street Journal.
Marcelene Edwards: 253-597-8638
blogs.thenewstribune.com/business
JOIN THE DISCUSSION | Register here
We welcome comments. Please keep them civil, short and to the point. ALL CAPS, spam, obscene, profane, abusive and off topic comments will be deleted. Repeat offenders will be blocked. Thanks for taking part — and abiding by these simple rules. A thorough explanation of rules of conduct can be found in our Terms of Service. If you have any questions, including why your comment may not be showing immediately after you submit it, be sure to visit the commenting FAQ.