NEWARK, N.J. -- Prudential Financial announced June 6 that it will be closing its equity research and trading business Prudential Equity Group.
The group will drop coverage of all the companies it covers and shut down offices across the globe. Nearly 420 employees will lose their jobs as a result, the company said.
"This business simply did not get big enough to be a long-term success," said spokeswoman Theresa Miller to the Associated Press. "Prudential's strategy is to be in businesses where we have significant scale."
Prudential Equity Group trades stocks for institutional investor clients like pensions and mutual funds. The business distributes research reports about stocks, politics, the economy and investment strategies to these clients to help them decide how to invest their money.
In 2006, the division reported revenue of $260 million, a small fraction of the company's $32.49 billion in revenue. Prudential Equity Group turned a profit of $34 million before taxes last year.
Prudential expects shutting the business down will cost $110 million, with severance pay for workers costing about $75 million. The costs will be recorded this quarter, Prudential said.
The division has offices in New York, Washington, San Francisco, Chicago, Philadelphia, Cleveland, Atlanta, Boston and Kansas City, Mo. Outside the U.S., Prudential Equity Group has offices in London, Zurich, Paris and Tokyo.