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Tuesday, February 2, 2010

Layoffs Hit DST

News summary by MFWire's editors

DST Systems just started a round of layoffs across the company, and its mutual fund back office unit is not immune. On Monday the Kansas City, Missouri-based firm revealed that it started up a seven percent across-the-company layoff, "affecting all DST domestic and international business units." (The Kansas City Star and a local Fox affiliate both put the layoff count at about 700 employees.) The company hopes to save about $67 million for the year, thanks to the cuts, while paying out about $21 million in termination benefits. It's unclear how the cuts will affect DST's mutual fund-focused business.

The MFWire could not reach spokespeople with DST for comment on the impact of the layoffs on the mutual fund unit.

Also on Monday, DST revealed a 2.3 percent rise in operating revenue (to $283.5 million) in the fourth quarter in its financial services segment (which includes the mutual fund servicing business). Its total mutual fund shareowner accounts increased from 120.3 million on September 30 to 121.1 million on December 31, thanks to bumps in its non tax-advantaged and subaccount counts. The unit anticipates bringing in about 100,000 registered accounts in the third quarter, thanks to new client commitments made during Q4. On the subaccounts side, DST's TA2000 clients plan to convert 2.1 million new subaccounts to the platform this year, though an existing subaccount client plans to convert about 600,000 subaccounts away from DST in Q3 (and DST previously noted that a subaccounting client plans to convert 5.0 million subaccounts away in mid-year.) 

Edited by: Neil Anderson, Managing Editor

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