Waddell & Reed is slashing 219 jobs and will not be moving its corporate headquarters in Kansas following LPL Financial's deal to buy its wealth management unit from Macquarie Group for $300 million, W&R and Macquarie said Monday.
"We can confirm that 219 is the number of employees impacted at Waddell & Reed Financial," a W&R spokesman said, following the company informing the Kansas Department of Commerce about the planned cuts on Feb. 26. The main details of that notice are listed on the Kansas Works website.
The Kansas City Star was the first to report the planned W&R job cuts, on March 2.
Industry Reactions
The planned job cuts did not exactly come as a surprise. After all, "from what we are seeing in the marketplace, cost cutting is king" today, according to Jon Henschen, president of recruiting firm Henschen & Associates.
"Cost cutting has been in high gear after sales, as we saw with the Advisor Group's hasty consolidation of three midsize broker-dealers into Securities America shortly after the Ladenburg sale closed" in early 2020, he told ThinkAdvisor on Monday. That followed Advisor Group's announcement in late 2019 that it was buying Ladenburg Thalmann's BD operations.
Layoffs of rank-and-file employees after an acquisition are "all too common," Henschen said. "LPL will have no use for staff or infrastructure, as the purchased advisors will be folded into their own infrastructure eliminating redundancies."
Echoing Henschen, Tim Welsh, president, CEO and founder of consulting firm Nexus Strategy, told ThinkAdvisor: "There is always collateral damage when firms are acquired, merged or sold — and a lot of that employee turnover is allocated to 'deal synergies.' There are always overlapping departments, functions and staff that can be eliminated as the combined organization rationalizes itself."
However, "the good news is that the industry is still growing, so my guess is that those let go will be in high demand," Welsh said.
More Details on Cuts
When asked about the job cuts, a W&R spokesman said: "Macquarie, Waddell & Reed and LPL are committed to taking a very careful and thoughtful approach in bringing together the capabilities and resources needed to help advisors, intermediary partners and their clients achieve their investment objectives while delivering exceptional service."
