I am the one who knocks


Bridgewater Thanks You For Your Service, But They’ll Be “Renovating” You Soon

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Last year, in what quickly became a veritable PR nightmare, Wal-Mart closed five geographically distinct locations for what the retailer called “plumbing issues.”

It became apparent that the “intractable leaks and clogs” that supposedly lurked beneath the locations might not have been there, and that the company was simply trying to cut corners wherever possible after implementing a much ballyhooed across-the-board wage hike. Then, things got even more suspicious when it turned out that one of the five shuttered locations had been a hotbed for union organization. In a final hilarious insult to low paid workers everywhere, a video was leaked in both English and Spanish featuring “employees” telling new hires how evil unions are.

Well it’s with that in mind that the following headline struck our eye: “Bridgewater to lay off employees in ‘renovation’

Here’s an excerpt from the CNBC coverage:

“Bridgewater Associates, the world’s largest hedge fund by assets, has announced a firm-wide “renovation” that will include employee layoffs, according to someone familiar with the matter.”

“In a letter to clients, officials at the $150 billion-asset company said it was “digging into the areas of inefficiency to improve them” as part of a “renovation to improve efficiencies at Bridgewater.” That process will involve “significant changes to people, processes, and technologies,” it added. At a town hall meeting earlier Thursday, Bridgewater executives warned that those changes would include layoffs.”

And here is the full letter:


“Dear —,

In a town hall meeting with employees today, we conveyed to the company that we will be conducting a renovation to improve efficiencies at Bridgewater, especially in the non-investment areas such as Technology, Recruiting, Facilities, and Management Services.

In the past, we made these sorts of internal changes privately and wouldn’t have bothered telling you about them as you won’t be directly affected. However, we decided to bring them to your attention because we have recently experienced distorted reporting in the media about what is happening at Bridgewater, so we want to provide you the real story.

To be clear, this renovation is coming at a time when our fundamentals are very strong: Our investment process is better than ever, our financial position is rock solid, our key employees who built the firm wouldn’t want to work anywhere else, and our clients remain confident in us (as expressed in their collectively investing $22.5 billion in new money since 2015). We are making these changes as a part of the ongoing process of constant improvement that has been the key to our success over the past 40 years.


As you know, about a decade ago, our assets under management were growing rapidly and Bridgewater’s leadership faced a choice: to remain a boutique or become an institution. To institutionalize Bridgewater meant building out areas of the company that a boutique doesn’t have or only modestly has, such as Security, Technology, HR, Facilities, Legal, etc. Building out those areas required us to hire a lot of people.

As a result, we grew dramatically. In 2003 Bridgewater had 150 employees; in 2011, when we began our management transition, we had 1,100; now we have 1,700. About 70% of this growth in headcount was in our non-investment areas. As one might expect, some of these areas became bloated, inefficient, and bureaucratic. As you know from dealing with us, we want to have pervasive excellence.

To deal with this situation, earlier this year, we realigned our management team to help push through needed improvements. These changes included Ray temporarily stepping back into active management of the firm as co-CEO, joining the existing senior management of Eileen Murray (co-CEO, who has been helping lead the company since 2009) and David McCormick (President, who has likewise been helping lead since 2009). We also brought in Jon Rubinstein as a co-CEO and made some other management changes. An added benefit of this shift was that it allowed Greg Jensen (who has been at Bridgewater 20 years) to devote his full attention to his role as co-CIO along with Ray and Bob Prince (who has been here for 30 years). These shifts in management roles were consistent with our plan to figure out how to best transition the leadership of the company over 10 years. (We are now 5 years into that plan.)

The new management leadership is now digging into the areas of inefficiency to improve them. Naturally that will involve some significant changes to people, processes, and technologies. As mentioned, the vast majority of this renovation will be in the non-investment areas that have seen the most growth to make them more effective in supporting our investment and client service areas.

As always our evolutionary process will be imperfect, iterative, and transparent, and it will make us more efficient.

What is of paramount importance is our sticking to the culture that has led to our excellent results. It is best summarized in the following sentence: We want meaningful work and meaningful relationships through radical truth and radical transparency. Transparently bringing problems to the surface and regarding them as intolerable might lead some people to wrongly conclude that we have more problems than organizations that don’t transparently bring problems to the surface. Our employees and our clients understand that this difference is essential to our success. It is also through this radical truth and transparency that they have learned to trust our integrity as well as our abilities.

As always, if you have any questions, let us know.

With appreciation for your understanding,

Ray, Bob, Greg, Eileen, David, and Jon


Well “Ray, Bob, Greg, Eileen, David, and Jon” (none of whom we assume are subject to this “renovation,” we have some suggestions in the way of improving “efficiency.” You might start, for instance, by asking Greg if he can do without one of his 10 giant monitors:


Oh, and get this all wrapped neat and tight before cross asset correlation relegates risk-parity to annals of hedge fund history.

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