Vanguard Group "looks for reasons to fire", claims report
Fund industry website Ignites.com says unnamed Vanguard employees report an increasing in firings for cause, while other mutual fund companies announce layoffs.
Last month, PhillyDeals asked if Vanguard, Chester County's largest private employer, was going to copy Fidelity Investments and other mutual fund giants and lay off workers in the market slowdown. Vanguard says it doesn't do layoffs, but we reminded readers that during the last industry slowdown - 2000-03 - Vanguard employees reported a surge in firings "for cause."
That saves an employer money, but it can be tough on families: Fired workers, unlike laid-off workers, have a hard time getting unemployment benefits. Vanguard denied a change in policy. Item here.
Today, Kevin Burke of www.ignites.com, a fund industry Web site, reports he's hearing Vanguard is at it again:
"Two former Vanguard employees tell Ignites that the company has instructed its managers to identify poor performers and look for reasons to fire them — reasons that may not have been considered valid in a rosier market. In other words, they’re given a separate set of criteria for dismissal when market conditions take a turn for the worse.
“'In this type of environment, [Vanguard] managers become more ruthless about finding reasons to let people go for cause',” says Dan Wiener, editor of the Independent Adviser for Vanguard Investors newsletter. 'It’s not a new strategy.'" Vanguard told Burke it's still hiring "selectively." Article here.
Vanguard founder John Bogle retired in the 1990s, but he's still acting as the firm's chief spokesman, with free ink in the Inquirer and the national financial press. But the people actually running Vanguard, newly promoted chief executive F. William McNabb 3d and chairman Jack Brennan, keep a lower public profile. They prefer one-way messages to Vanguard shareholders, instead of the public battle of ideas, where Bogle excels.
Here's a summary of remarks by Brennan to a recent industry gathering in Philadelphia. More about Brennan's leadership within the fund industry, here.