Investment company abrdn has announced plans to cut 500 jobs and outsource more work as part of a £150m cost-saving initiative, while still paying bonuses to staff. The fund manager aims to simplify its internal structure by removing layers of middle management, with frontline client-facing roles unaffected.
Chief executive Stephen Bird stated that recognising 'performing colleagues' through bonuses remains important. The company also plans to outsource certain roles and reduce non-staff costs, including selling office space and renegotiating supplier contracts. The cost-cutting programme is expected to run until the end of 2025.
abrdn suffered £12.4bn of net outflows in the second half of 2023, which it attributed to high inflation and geopolitical uncertainty. Bird said market conditions remain challenging, and the cost actions are necessary to restore core investments to an acceptable level of profitability. The company's share price initially fell but recovered to rise nearly 4%.
Details of the bonus pot for 2023 will be revealed on 27 February. In 2022, abrdn paid £85m in bonuses, down from £126m the previous year, and Bird's bonus was cut by 62.4% due to missed targets. Affected staff, who are not unionised, are expected to be let go by the end of 2024.
