Investment company plans to layoff 133 local workers

Capital Group Cos., an investment management firm that sells and manages the American Funds family of mutual funds, will lay off 133 local workers over the next two weeks, a spokesman said Thursday.

"Our assets have declined, and we have built an effort to reduce expenses and bring our costs in line," said Chuck Freadhoff, a spokesman for Capital Group in Los Angeles. The firm's assets, he said, have fallen from $1.2 trillion at the end of 2007 to "a little more than $850 billion" as of March 31.

Capital Group has about 850 employees in offices in Chesapeake, Norfolk and Virginia Beach, Freadhoff said. All of the offices will reduce staff, he said. More than 100 of the layoffs, he said, will involve workers with American Funds Distributors, a sales division of American Funds.

The affected employees will be laid off this week and next. "The reason it is taking us two weeks is that we're meeting with each affected associate individually," Freadhoff said.

All will receive severance packages, ranging from three months' to one year's salary, based on seniority, he said.

"We have no plans at this time to close or to pull out of the Hampton Roads area," he said. "We will still have several hundred employees."

Capital Group has two major divisions. One sells and manages the assets of American Funds; the other manages the assets of institutional clients in pension funds.

American Funds mutual funds are sold only through brokers and financial advisers.

The downturn notwithstanding, "we have a very strong balance sheet," Freadhoff said, "and we expect and plan to continue to service our clients into the future."

Philip Walzer, (757) 222-3864, phil.walzer@pilotonline.com