By Sam Mamudi

NEW YORK (Dow Jones) -- Just days before the release of its fourth-quarter earnings, Franklin Resources Inc. confirmed Thursday that it plans to cut 4% of its global workforce.

The cuts, announced to staff on Wednesday, will total about 350 of Franklin's (BEN) 8,600 staff. The cuts are in addition to a 2% reduction announced in October.

A Franklin spokeswoman said further comments will be provided in Franklin's earnings conference call on Jan. 28.

Franklin said last week that its assets under management fell 18% in the fourth-quarter, to $416.2 billion. This reflected a "combination of record outflows and a sharp drop in equity and fixed-income markets during October," according to Matt Snowling, analyst at Friedman Billings Ramsey.

Franklin's announcement comes as asset managers reveal steep falls in profit in the fourth quarter. On Wednesday, BlackRock Inc. (BLK) said its profit fell 84%, to 68 cents a share an adjusted basis compared to average analyst estimates of $1.26 a share.

AllianceBernstein (AB) said Wednesday that its fourth-quarter profit fell by 73%, while on Thursday Janus Capital Group (JNS) announced an 85% drop in its fourth-quarter profit, compared to the year-ago period.

Despite the cuts, there are still some who take a favorable view of Franklin's outlook. Robert Lee, analyst at Keefe Bruyette & Woods, rated the firm as his top pick among asset management stocks.

"Most asset managers have gone through a headcount reduction, so it's not a surprise," Lee said in an interview. "The pressure on revenue is tremendous -- business is challenging for everybody, including Franklin."

Among firms that have announced their full fourth-quarter results, AllianceBernstein cut its staff by 12% in the fourth quarter, while BlackRock announced cuts amounting to 9% of its staff.

But, said Lee, there are factors that make Franklin the best "risk-adjusted recommendation" in the sector, including its diversified product line, competitive performance of its funds and global distribution. And Franklin also has a "pristine balance" sheet, added Lee, with minimal debt and a "significant" amount of excess cash and investments.

"In a stressed environment such as this one, they're one of the few companies that could be opportunistic [and make acquisitions] if they chose to do so," said Lee.

Lee added that while Franklin's may not have the best performance, and its stock may not rise the fastest in an upturn, it offers the best downside protection in the sector.

Franklin didn't say how much of its $91.1 billion drop in fourth-quarter assets were due to net outflows. AllianceBernstein and Janus said they had seen net outflows in the quarter of $23 billion and $3 billion, respectively.

Credit Suisse analyst Craig Siegenthaler said he expects net outflows at Franklin of $12 billion to $13 billion for the fourth quarter.

According to Franklin's preliminary figures, its assets under management fell 35.3% in 2008, from $643.7 billion. During the same period, AllianceBernstein saw a 42% decline in assets, to $462 billion.

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