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Abrdn plans to axe 500 jobs as the UK asset manager seeks to lift profits and revive a languishing share price.
The job losses are the centrepiece of a £150mn cost-saving programme Abrdn set out on Wednesday, as the company revealed that outflows from its funds had accelerated in the second half of last year.
Since his appointment as chief executive in 2020, Stephen Bird has sought to overhaul its funds in a bid to staunch outflows from cautious clients amid market uncertainty. More than 250 of its investment funds have been closed, restructured or merged since the former Citigroup executive took the top job.
“The share price is not where we want it . . . it is incumbent on us to adjust the business,” Bird said on Wednesday morning.
Shares in the company fell by almost 4 per cent in morning trading on Wednesday in response to the detail on the group’s cost-cutting plans and outflows.
In a statement, Abrdn said that “after a root and branch review, we are now re-engineering and simplifying our business model to remove at least £150mn of costs — mostly from group functions and support services”.
In an email to employees on Wednesday, seen by the Financial Times, Bird said the changes would remove management layers, increase efficiency and reduce cost. “We need to do more, across the group . . . the way forward is not easy,” he said.
The group will still pay bonuses for some staff this year, with Bird saying in a media briefing on Wednesday that it was important to recognise “performing colleagues”.
Investors pulled £9.5bn from Abrdn’s funds in the six months to the end of December, rising to £12.4bn when including the money pulled from funds but remaining on Abrdn’s investment platform in cash. This was more than double the £4.4bn investors withdrew in the first half. The group pinned some of the blame on geopolitical uncertainty.
Bird said: “The new transformation programme . . . when completed, will deliver a step change in our cost to income ratio.”
David McCann, analyst at Numis, said: “[This is] a step in the right direction, but more needs to be done, not just in terms of better aligning the costs with revenues, but more broadly group strategy and shareholder value maximisation and a credible plan to return to growth (or at least reduce the pace of decline).”
Abrdn, which was formed through the merger of Standard Life and Aberdeen Asset Management in 2017, employs about 5,000 people.
