Edinburgh-based investment firm Abrdn has unveiled plans to reduce its workforce by approximately 10%, cutting around 500 jobs as part of a broader strategy to slash £150 million from its annual costs. The cost-cutting initiative is geared toward making the business more profitable, with the majority of the savings targeted at non-staff expenses.
The firm highlighted that £8 out of every £10 in savings would be concentrated in its investments arm, which faced structural challenges during the six months leading up to December. Global market conditions, influenced by geopolitical uncertainties, led to capital outflows within the industry.
Abrdn outlined various measures to achieve the cost reduction, including the removal of management layers, increased efficiency in outsourcing and technology, and significant savings from support services. The cost-cutting process is expected to cost the company around £150 million, with the majority of the expenses incurred this year.
“Market conditions have remained challenging for our mix of business,” stated CEO Stephen Bird. “The board and I are committed to taking these significant cost actions now to restore our core Investments business to a more acceptable level of profitability.”
Despite exceeding the £75 million cost-reduction target for 2023 in investments, Abrdn acknowledged the need for further adjustments. The company is undertaking a comprehensive business model re-engineering and simplification to eliminate at least £150 million in costs, primarily from group functions and support services.
Abrdn reported a decrease in assets under management and administration from £495.7 million in the middle of the previous year to £494.9 million by the end of the year.
The announcement confirms a prior Sky News report, and shares of Abrdn experienced a 1.7% decline on Wednesday morning.
