abrdn PLC on Wednesday confirmed it is cutting 500 jobs as part of a transformation programme designed to reduce costs by £150 million per year.
The fund manager said the programme is designed to restore “our core Investments business to an acceptable level of profitability and allow for incremental reinvestment into growth areas”.
Chief executive Stephen Bird said: “Market conditions have remained challenging for our mix of business, and this is reflected in our year-end AUMA, flow numbers, and margins.”
Assets under management fell to £494.9 billion in the second half of 2023, from £495.7 billion in the first half of the year, with net outflows rising to £12.4 billion during the period.
The firm said the Investments arm continued to face structural headwinds, with high inflation and geopolitical uncertainty continuing the trend to cash and de-risking of client portfolios.
“The changing dynamics and challenges within traditional asset management are well known and we continue to reshape our business to take account of these factors,” it said.
For the group overall, the firm expects 2023 adjusted operating profit to be broadly in line with consensus and adjusted capital generation to be above consensus, owing to higher interest income on the group's cash balances.
The company said the cost cuts would come mostly from group functions and support services and largely be implemented in 2024, completing in 2025.
Around £60 million of the benefit will be seen in 2024, the firm said.