Wells to Drop Former Strong Workers

October 21, 2004 (PLANSPONSOR.com) - Scandal plagued Strong Financial Corp. will cut 107 jobs at the end of 2004, according to a notice the company filed with the state

The layoff announcement, filed with the state Department of Workforce Development, said there would be a 12% cutback in the Menomonee Falls, Wisconsin-based firm’s workforce of about 900, the Milwaukee Journal reported. The announcement follows San Francisco-based Wells Fargo & Co.’s agreement in May to buy Strong’s assets in a deal expected to close by year end (See  Wells Acquires Scandal-Plagued Strong Financial   ).

A week before the purchase, company founder Richard Strong agreed to pay a $60 million fine to settle allegations he made improper mutual fund trades. Strong Financial agreed to pay $115 million in related penalties.

Strong had 1,079 employees when the deal with Wells Fargo was announced but that has been reduced by attrition, said Stephanie Truog, a Strong spokeswoman.The 109 employees being cut will be provided with a generous separation package, Truog said. The job losses will be spread throughout the firm, she said.

In other merger news, Wells Fargo has said it would likely move Strong’s 401(k) processing and record-keeping area, which employs fewer than 20 people, to Roseville, Minnesota.

The company said in June it would retain “substantially” all of Strong’s about 70 investment professionals such as portfolio managers and analysts. It has also said it will keep Strong’s call center in Menomonee Falls and possibly add to the approximately 175 local workers.