Carlyle Group Announces 100 Layoffs

The Carlyle Group, the District-based private equity giant, will lay off 10 percent of its staff due to the current economic conditions, a spokesman said yesterday.

The company, which employs around 1,000 full-time staffers in 33 offices around the world, said it will lay off around 100 employees, who were informed today.

Most of those affected will be back office staffers, although there will be some professional dealmakers who will be laid off as well. Everyone who is laid off will receive a severance package, according to a spokesman.

"We did a thorough examination of every aspect of the firm and we are adjusting the firm's cost structure to the current investment climate," said Carlyle spokesman Chris Ullman. "We are reverting to the size we were as of 2007 staffing. We need to balance our cost structure, which is people and expenses, with the volume of business."

The private equity firm, which has $92 billion under management and $40 billion in money committed from investors that has yet to be put to work, has seen the volume of its business deals slow to a crawl. As a result, there is not enough work for some people to do.

A spokesman said that despite the firm's success and healthy balance sheet, it could not justify keeping the same level of staffing.

"These are tough times," Ullman said. "We are still going to be the largest firm out there in terms of products offered. These are modest, targeted cuts to position the firm."

Carlyle has returned more than 26 percent annual returns to its clients, net of fees, over the last two decades. It's three co-founders have become billionaires and many of its employees have become wealthy.

Carlyle and other firms have had difficulty conducting their business in recent months as the credit crisis has frozen capital markets. CitiGroup announced it was laying off 50,000 employees and Goldman Sachs also announced significant layoffs recently. A London-based publicly traded private equity firm known as 3i also today announced it was laying off 15 percent of its staff.

Last month, Carlyle closed its Warsaw office and ended financial operations in certain Eastern Europse and Asian markets, which resulted in the layoffs of 18 employees.

Despite the slowdown, Carlyle has still managed to pull off a few deals this year. It bought the government operations end of Booz Allen Consulting for $2.54 billion last summer and it recently sold an axle automotive company to General Dynamics.

By Tom Heath  |  December 3, 2008; 2:18 PM ET  | Category:  Economy Watch , Value Added
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