Janus Cuts 16 Percent of Workforce Feb 2 4:52pm ET

By Christopher Noble

BOSTON (Reuters) - Janus Capital Corp said on Friday it plans to cut 468 customer support jobs -- 16 percent of its workforce -- in response to slowing demand for its products and increased automation of its services, in the latest sign that the company's fortunes have flagged.

The cuts are all in operations such as phone operators, mail processors and trainers, said a spokeswoman for Janus, a unit of financial conglomerate Stilwell Financial Inc .

"Beyond Janus funds' underperformance in 2000, the declining volumes can largely be attributed to the fact that the firm proactively closed nearly half of its equity funds to new investors," Margie Hurd, president of Janus Service Corporation, said in a statement.

The layoffs will have no effect on Janus's investment team or its investment decision making, a Janus spokeswoman said.

"This has no impact on the investment management team where we continue to recruit and hire analysts," Janus spokeswoman Jane Ingalls said.

Shares in Stilwell closed 2.07 percent lower at $42.11.

Janus, once a marginal player, transformed itself in the last decade into arguably the premier mutual fund firm in the country. It attracted more money by far than any of its rivals last year, pulling in $37 billion for the year.

But the company's fortunes flagged in the last months of 2000 as investors soured on the technology and growth sectors that are heavily favored by Janus portfolio managers.

All but one of Janus's equity funds open for more than a year ended the year with negative returns.

ASSET BASE SHRANK SHARPLY

As a result, Janus's asset base shrank sharply at the end of 2000, adding to a tough year in which it endured an acrimonious dispute with its former parent, Kansas City Southern Industries, over a spinoff plan.

From its peak at about $300 billion in October, assets under management fell to $260 billion at the end of the year, before rebounding to $276 billion in January.

Analysts said it was not surprising that Janus was cutting staff and added that cutbacks were likely around the industry as it adjusted to an era of slower growth and more automation.

"It's understandable. I wouldn't be surprised if others are in the same situation," said Geoff Bobroff, an independent mutual fund consultant.

"All these companies were affected by the surge in interest and they will be impacted by the slowdown," he said.

While flows to mutual funds in December rebounded from low levels in November, they remain far below their year-ago levels, according to figures from the Investment Company Institute, the industry trade group.

In December 2000 net new cash to stock mutual funds totaled $11.6 billion. A year earlier, cash inflows were $24.3 billion, ICI data shows.

The layoffs affected 249 jobs in Denver and 219 in Austin, Texas, Janus said.

Janus said that since December, when it allowed clients to open new accounts on-line, about 20 percent of all new accounts have been opened that way and 62 percent of the investors who made contact with Janus last month did so via the Internet. This compares with 34 percent of investor contacts in January, 1999.

Stilwell also includes the Berger fund family, Nelson Money Managers Plc and a stake in DST Systems Inc

http://www.siliconinvestor.com/headlines/financial/20010202/281709.html

-- Martin Thompson (mthom1927@aol.com), February 02, 2001