Just one day after UK-listed buyout house 3i revealed it was to cut 15 per cent of its workforce, the Carlyle Group and American Capital have announced major job cuts.
The decisions are the first large-scale redundancies in the private equity industry following the credit crunch and economic downturn.
Carlyle Group, despite recently raising a $14bn (€11bn) fifth fund, is to cut around 100 staff from its global workforce of 1,000 people.
The cuts will be spread “fairly evenly” across the firm's operations, although certain areas are believed to have been singled out for more significant losses, including professionals focusing on take-privates.
The firm is also closing its office in Silicon Valley, and last week revealed plans to shut its Central and Eastern European operations, based in Warsaw, and its Asian leveraged finance business.
The reductions will return Carlyle to its 2007 staffing levels.
American Capital has also announced that it is implementing cost-cutting measures in response to market conditions. The changes affect American Capital and its wholly owned European affiliate, European Capital.
Included in the measures are the loss of 110 jobs – or 19 per cent of the workforce – the closing of two offices, and the elimination of certain functions at other offices. Additional internal cost-saving steps are also being implemented, said the firm.
"We are operating in an unprecedented market environment," said Malon Wilkus, chairman and chief executive of American Capital, in a statement. "We are not investing at the rates we have in the past and therefore need to size our operations to our current volume of business. Though these changes are difficult, we believe they will result in a stronger and more flexible company.”
Following these measures, American Capital and European Capital will have 46 investment teams, comprising around 160 investment professionals, located in 11 offices worldwide.