(Bloomberg) -- Bridgewater Associates, the world’s largest hedge fund manager, indicated it’s planning to cut jobs as parts of its business have become too large.
The firm told clients in a letter that it has 1,700 employees, up from 1,100 five years ago and 150 in 2001, according to a person who saw the letter. The changes follow a shake-up in the management team that occurred earlier this year.
The letter -- written by founder Ray Dalio and his other top executives -- called the changes “conducting a renovation” and described some of Bridgewater’s non-investment areas as “bloated, inefficient, and bureaucratic.”
The layoffs come as the firm, which manages $150 billion, may make less money this year because of mixed performance. Its main hedge fund has fallen about 9 percent, meaning it won’t generate any performance fees in 2016 unless it erases those losses. A fund that started early last year and has helped the firm pull in $22.5 billion since then is flat for 2016. Only its low-fee product, the passive All Weather Fund, is up, returning 13 percent.
“To be clear, this renovation is coming at a time when our fundamentals are very strong,” the firm said in the letter.
The personnel cuts could also affect a deal the firm made with Connecticut earlier this year. The state said it would give Bridgewater a $5 million grant for training and energy assistance and a $17 million low-interest loan that may be forgiven if it creates 750 jobs by the end of 2021 and keeps an existing 1,400 jobs in the state.
Other hedge fund managers have also eliminated jobs in the face of losses. Last month, Paul Tudor Jones, the billionaire who runs Tudor Investment Corp., cut 15 percent of his global workforce amid client redemptions.
Earlier this week, Dalio reiterated his views that the economy is at the end of a long-term debt cycle, characterized by a lack of spending despite interest rates near zero or even negative. He said in an interview in March that consumers will have to be encouraged to spend, which could include sending cash directly to them.
Ryan Fitzgibbon, a spokeswoman for Westport, Connecticut-based Bridgewater, declined to comment. The planned job reductions were reported earlier Thursday by Business Insider.