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Tuesday, June 24, 2003

American Century Still Shrinking

by: Sean Hanna, Editor in Chief

American Century is trimming its sales in front of the summer doldrums. Last week the Kansas City-based fund firm made a buyout offer to workers in its retail shareholder services group. The offer was extended to roughly 600 workers and about 60 to 80 are expected to take the firm up on it, a spokesperson told the MFWire.com.

The buyout offer is part of the fund firm's attempts to align its workforce with the workflow. "We are seeing a little of the typical summer fall-off that has regularly occurred over the past 15 years. Though we think that things will come back in the fall, we foresee that we will still have capacity to accommodate this type of program," explained the spokesperson.

He added that American Century has achieved efficiencies in the group because of technology it has adopted. More customers are initiating contact with the firm over the Internet, for example.

The cutback is also a response to the changing distribution channels by which shareholders find the firm. Nearly half (48 percent) of new fund purchases at American Century now come through an advisor. "We are not only retail anymore, more of our business is coming in through advisors. The way customers interact with us has evolved over the past three to five years," confirmed the spokesperson.

The package includes a payout based on both the salary level and the tenure of the employee. It also includes a prorated bonus for 2003. Those accepting will be paid at least three months' salary and health benefits. Those with more than three years tenure will also get one month's salary and health benefits for each year of service.

The voluntary severance offer was made last week to the employee group that includes workers in Kansas City, Denver and Mountain View, California and is set to for a month through mid-July. The majority of the workers have jobs in which communication with retail shareholders is their primary responsibility. That includes phone workers and those who process transactions as well as staff dedicated to instant messaging.  

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