Abrdn to axe hundreds of jobs as part of a multi-million-pound drive to slash costs

Abrdn plans to slash hundreds of jobs as part of a multi-million-pound cost-cutting drive.

The FTSE 250 asset manager is expected to announce a batch of redundancies as soon as today alongside a trading update that may show it suffered billions of pounds of outflows from its funds in the second half of last year.

The scale of the cuts is predicted to be in the region of 10 per cent of the firm’s 5,000-strong workforce, equivalent to almost 500 staff, Sky News reported yesterday.

The cuts are expected to focus on the support and control sides of the business, while the investment division will see minimal redundancies.

The plans come amid a long-running cost-saving programme orchestrated by Abrdn’s boss Stephen Bird, who took over in 2020.

During his tenure, the firm has struggled to return to profit and boost its share price, which has declined by a third over the last five years. The stock has also lost 26pc of its value in the last six months.

Over 100 of the group’s funds have been closed down, merged or restructured.

And last month reports emerged it has halved redundancy payments and reduced the length of paid parental leave by a third.

The scale of the cost-saving efforts has left some members of staff considering legal action, alleging Abrdn’s tactics may have breached employment law.

‘Abrdn’s trust with employees has gone,’ one employee told the Financial Times.

But sources close to the firm said Abrdn has taken ‘full legal advice’ and staff knew the steps were ‘necessary’ to ‘modernise the firm and create the right culture’. 

The layoffs follow Abrdn’s decision to appoint management consultants Boston Consulting Group (BCG) late last year.

BCG is part of the ‘big three’ management consulting firms which also include McKinsey and Bain & Co.

The company has been hit heavily by clients pulling money out of its funds and mounting losses.

Market conditions have soured following sharp hikes to interest rates, soaring inflation and global instability sparked by the war in Ukraine and the situation in Gaza and the wider Middle East.

In its last set of results in August, Abrdn reported that £4.4billion had been pulled out of its funds in the first half of last year while it also suffered a pre-tax loss for the period of £169m.

At the time, the group noted it had nearly £496billion of assets under management.

Shares in Abrdn fell 3.2 per cent, or 5.65p, to 172.3p.