Principal Financial Group Inc. announced today that it is eliminating about 300 positions in Des Moines and approximately 250 jobs in 45 other locations due to continued deterioration of U.S. and global financial markets. The reduction represents approximately 3.5 percent of Principal’s work force, the company said in a release. It has approximately 8,000 employees in Des Moines.

The layoffs were spread among all departments and job levels, said Mary O’Keefe, a senior vice president at Principal, in an interview with the Business Record. She declined to name specific positions that were eliminated. Principal would not release the amount it expects to save by these reductions.

O’Keefe said these layoffs were in response to a downturn in the market this fall and what Principal projects its revenues and expenses will be in the upcoming months. The company does not plan on more layoffs at this time.

“Our hope is the economy goes the other direction, and we see some improvement and return to normal,” she said, “but given the projections today, this is the action we’re taking.”

Principal is doing “everything possible to ease this difficult transition,” O’Keefe said. All employees whose positions have been eliminated will receive severance pay and career assistance. Most affected employees’ release date will be Dec. 31, but whether they stay on full time until then is up to the employee and his or her manager, O’Keefe said.

In August, Principal laid off 56 employees from its Principal Global Investors commercial real estate operations, with 46 of those positions being cut in Des Moines. The company said those layoffs were due to the turbulence in the real estate market.

The company also began implementing cost-cutting measures when the economy deteriorated in October, including reducing advertising, sponsorships and travel, not filling open positions and halting merit increases for higher-level employees.

These actions are in response to a situation O’Keefe describes as “unprecedented market conditions.”

“We’ve been through a lot of economic cycles,” she said. “But we believe this is probably a higher level than we’ve ever seen before given that this is an economic condition that we’ve never seen before.”

Principal last month reported operating earnings of $251.2 million for the third quarter, a 21 percent decrease from the $316 million reported for the third quarter of 2007.

The global financial services company had $287.4 billion in assets under management as of Sept. 30, a 6 percent decrease from the year before. However, the company said its strong net cash flows offset a substantial portion of the impact of equity market declines, which include a 24 percent drop in the Standard & Poor’s 500 index over the same period.

Principal recorded third-quarter capital losses of $156.3 million, which included $114.1 million in losses from Lehman Bros. Holdings Inc. securities and $41.2 million in losses related to the failure of Washington Mutual Inc. in September.

Principal has applied to participate in the Treasury Department’s Capital Purchase Program, but O’Keefe said the company has not heard whether it has been approved or decided to what extent it would participate. It has applied for up to $2 billion. O’Keefe added that Principal would not participate in that program because it is in trouble, but rather that it would use it as part of a plan to increase the flow of credit to the real estate and bond markets.