Hundreds of jobs are understood to be at risk at Gam Investments as the embattled asset manager looks to cut costs following a tough year.
According to the Financial Times, recently installed chief executive Peter Sanderson (pictured) held a company town hall where he suggested to staff substantial cuts were looming as the firm restructures its back-office systems.
“There’s scope for several hundred job losses over the next two to three years,” a person with knowledge of the situation told the publication.
Bloomberg said the job losses could hit 350, representing 40% of staff.
It follows an announcement last week that group head of investments Matthew Beesley had left the firm in the latest reshuffle to the leadership team. His role will not be replaced, Gam said in a statement.
Is Gam overstaffed?
According to Gam’s half-year report, the company had 863 full-time employees as at 30 June 2019, down from 935 the year before, and assets under management of CHF136.1bn (£105.9bn).
Willis Owen head of personal investing Adrian Lowcock said it is difficult to guess what is a reasonable number of employees for an asset management firm because the figure depends on the number of markets covered and the need for analysts and distribution networks.
He added: “Some of the funds Gam have run will require specialist expertise and IT systems which may require staff. However, if the rumour of up to 40% staff cuts are to be believed then this suggests a complete overhaul of the business along with the fact that it may have been overstaffed prior to its issues.”
ARBF range prompts torrid period of outflows
Gam has endured a testing 16 months with heavy redemptions and a shakeup of senior management following the dismissal of Tim Haywood and the liquidation of his £8.5bn absolute return bond fund range. The group was subsequently forced to undertake drastic restructuring efforts, including axing 10% of its workforce.
The company reported losses of €12.3m in H1 this year and outflows of £1.1bn from its investment arm in Q3, taking assets to £39.9bn.
Sanderson has been attempting to turn the business around since joining the firm in September from Blackrock. Last month he hired fellow Blackrock veteran Steve Rafferty to serve in the new role of chief operating officer.
Chelsea Financial Services managing director Darius McDermott said: “Lots of asset managers’ sales have been difficult in the last few years so it would not come as a surprise to see some jobs go. The article refers to admin and back office roles which is most likely given they are areas where technology can potentially be used to save money.”
Gam declined to comment.
