Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
UK asset manager Abrdn is preparing to make hundreds of job cuts as part of a drive to cut about £150mn in costs.
The cuts could amount to about 10 per cent of Abrdn’s 5,000-strong workforce and are due to be announced on Wednesday during a trading update, according to a person familiar with the situation.
Cuts will be minimal on the investment side and will focus on support and control functions, the person said. They follow Abrdn’s appointment late last year of adviser Boston Consulting Group.
Abrdn declined to comment on the redundancies, which were first reported by Sky News.
Under Stephen Bird, chief executive since 2020, Abrdn has tried to cut expenses to return the asset manager to profitability and boost its share price.
More than 100 of the group’s investment funds have been closed, restructured or merged, and last year about a fifth of the group’s multi-asset team were cut.
The redundancies come as relations between management and staff are already under strain.
The Financial Times revealed in December that Abrdn was halving redundancy payouts and reducing the length of paid parental leave by about a third.
A group of employees has alleged that the moves may have breached employment law and they are exploring whether to mount a legal challenge. They take issue with how the process was conducted and how the changes were communicated with employees, according to two people familiar with the situation.
“Abrdn’s trust with employees has gone,” one of the people added.
At the end of last year, Abrdn confirmed plans to halve redundancy payouts and reduce the length of paid parental leave from 40 to 26 weeks.
Abrdn said: “We continue to offer a leading employee proposition that compares well with other large employers in the sector and more widely. These updates to our approach mean that Abrdn is aligned both to market practice and our ambition to deliver a more efficient operating model.”
The company said it “actively engaged” with employees “throughout the process of updating our employee proposition and made several changes based on their feedback”.
A person close to the company said Abrdn “took full legal advice. Solid ground. Most employees know these are necessary steps to modernise the firm and create the right culture.”
Abrdn was formed through the merger of Standard Life and Aberdeen Asset Management in 2017.
The past 18 months have been characterised by client outflows and losses, and the company has dropped in and out of the FTSE 100 index. Abrdn’s shares are down 47 per cent from their most recent high in December 2019, and are down about 14 per cent in the past year.
The asset manager was hit by larger than expected outflows in the first half of 2023, with investors pulling a net £4.4bn from its funds on top of a net £10.3bn in 2022. It reported a pre-tax loss of £169mn for the six months to June 2023, and a £615mn loss for its previous financial year, driven by investment performance.