F-Squared Investments Inc., the largest ETF-based portfolio builder, is cutting up to 25% of its workforce Thursday as the firm reels from an admission it misled investors about its performance, a source with knowledge of the plans told InvestmentNews. The 40 layoffs across the 161-staff firm come three months after the money manager publicly admitted to touting a false track record in its “AlphaSector” strategy and agreed to pay $35 million to settle the charges.