The asset manager unveiled its latest cost-cutting initiative, which aims to slash annualised costs by £150 million by the end of 2025. The move includes the elimination of roughly 10% of its workforce. 

Stephen Bird, abrdn’s CEO labelled the initiative a “transformation programme,” emphasising its necessity despite the initial £75 million cost reduction target in 2023. 

abrdn attributed the challenges to “economic uncertainty and the impact of the higher cost of living on disposable incomes.” It also comes on the back of an acceleration of outflows from its funds in the second half of last year. 

“Market conditions have remained challenging for our mix of business,” said 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.”

This £150 million target comes in addition to previous cost-cutting measures, such as the divestment of the European-headquartered private equity business. In addition, since Stephen Bird’s appointment as chief executive, more than 250 of the company’s investment funds have been closed, restructured, or merged. 

This new programme includes the removal of management layers, increased spans of control, enhanced efficiency in outsourcing and technology, and reduced overheads in group functions and support services.

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Bird outlined the company’s commitment to further re-engineering and simplifying its business model, targeting substantial cost reductions primarily in group functions and support services.

“The program will largely be implemented in 2024, concluding in 2025. These changes will allow us to continue our focus on building a growth business,” said Bird.

The company asserted that the move will result in more streamlined operations, efficient resource utilisation, and improved management accountability. The increased profitability will allow for incremental investments to deliver better customer outcomes, they say. 

“The share price is not where we want it,” said Bird, ”It is incumbent on us to adjust the business.”