The exit of three asset management companies (AMCs) has resulted in nearly 100 mutual fund (MF) jobs being lost, say those in the sector. The numbers could go up if the buzz surrounding the exit of more holds true.
In the past year, Morgan Stanley MF, ING MF and PineBridge are the three AMCs to have exited the business. Morgan Stanley was acquired by HDFC MF, ING MF by Birla SunLife and PineBridge by Kotak MF.
Since all the three deals involved acquisition of existing schemes and not total buyout, several employees were served pink slips before completion of the deal, according to people in the know
Sectoral insiders put job losses in the HDFC MF- Morgan Stanley deal at about 60, while the figure stands at 30 in the deal involving PineBridge AMC. Birla SunLife MF is believed to have absorbed a certain number of employees of ING MF, while a few were absorbed by ING for its global operations.
A Balasubramanian, chief executive officer (CEO) of Birla SunLife MF, told Business Standard, "There were 30-35 employees in ING MF and we hired around 12 in our own operations."
Email queries to HDFC MF and Kotak MF did not elicit responses.
Most employees who lost their jobs were in sales and marketing. Research analysts and fund managers, too, were asked to go in several cases.
Executives say the trend of acquiring only the schemes and not the entire operations is worrying from the perspective of employees.
"This is the most unfortunate part of consolidation. Since buyers are big players, they are only concerned about asset size and investors," said an executive vice-president of a mid-sized fund house.
Buyers have their reasons not to absorb the work force of a target company. Sector officials say the acquirers already had a full work force and did not need more people.
The 2012 acquisition of Fidelity MF by L&T Finance had seen absorption of employees, an approach missing in recent deals.
It is believed Fidelity, which was a fairly large player, might have placed such a condition.
