The 560 layoffs announced last week by Franklin Templeton Group will not affect the mutual fund company's asset management or distribution employees, the company said.

The layoffs, Franklin's first ever, are to trim its payroll by 7% and will require a $58 million charge against earnings.

The layoffs were not earnings-related, the company said. Rather, they resulted mainly from combining Franklin's back-office operations with those of the Templeton and Mutual Series fund companies, which Franklin bought in 1992 and 1996, respectively.

Franklin, one of the biggest fund distributors through banks, attributed disappointing earnings in its latest fiscal quarter partly to investors' shifting of assets from its stock funds to its less-profitable bond funds.

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