The Legg Mason unit headed by Bill Miller is reportedly laying off 40 to 50 people, or about a third of its staff, a day after its parent company unveiled its third straight quarterly loss (see The MFWire, October 29, 2008).

Legg Mason's hometown paper, The Baltimore Sun, and The Wall Street Journal quoted a statement from Legg Mason Capital Management, which Miller leads as chairman and chief investment officer, that the decision to reduce staff was reached "given the unprecedented market environment and its impact on our assets under management."

Notices are going out on Thursday, according to The Sun.

The Journal reported that the cuts will include some research employees. Senior investment staff will not be affected by the layoffs.

Other Legg Mason subsidiaries may also be seeing job cuts. Legg Mason CEO Mark Fetting told The Journal that the "affiliates decide" how they want to manage costs.

Legg Mason on Wednesday posted a loss of $103.8 million for its fiscal second quarter, compared to net income of $177.5 million last year. The loss was mainly because of charges associated with its support for money market funds.

But Legg received some good news as well. Its stock jumped 30 percent to $16.92.

"There's a feeling that, considering the asset flow trends, maybe things have bottomed at Legg Mason," Standard & Poors equity analyst Matthew Albrecht told The Journal. 

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