AMP to cut jobs by ‘up to 20pc’
A far-reaching staff redundancy program will curb costs and centralise some functions across its Australia and capital business units.
Embattled wealth group AMP has kicked off a far-reaching staff redundancy program, that will see it curb costs and centralise some functions across its Australia and capital business units.
The plan was outlined in a memo to staff sent by AMP chief executive Francesco De Ferrari, and sources believe it might lead to sharp headcount cuts of up to 20 per cent in parts of the two impacted divisions.
“AMP has made changes to its teams that will centralise some business services. Our focus is on continuing to reshape the organisation to drive efficiency and support the delivery of AMP’s strategy to become a simpler, client-led organisation,” an AMP spokesman said on Wednesday.
The plan is said to include combining services such as human resources and legal across AMP’s Australia unit - which includes advice, wealth and the bank - and the AMP Capital division which houses functions including infrastructure, real estate, equities.
It comes as AMP continues to reel from the departure in August of the head of its Australia unit Alex Wade for inappropriate conduct and the demotion of Boe Pahari as AMP Capital boss.
Mr De Ferrari is seeking permanent executives to run both divisions, following a stinging investor backlash against Mr Pahari’s promotion mid year, given he had a 2017 sexual harassment complaint against him and was hit with a financial penalty over the behaviour.
The investor furore led to then AMP chairman David Murray stepping down from the board along with fellow director John Fraser, while Mr Pahari was demoted.
The change to remove duplicated functions suggests AMP Capital will become more integrated with the parent entity, and also pours cold water on a potential sale of the division.
The Australian revealed in August that Goldman Sachs had joined Credit Suisse on a joint AMP mandate to consider strategic options for the wealth group and its business units, including a sale or break up. Law firm King & Wood Mallesons is also on the mandate.
New chairman Debra Hazelton in early September confirmed an AMP portfolio review was taking place to “assess all opportunities” to maximise shareholder value.
At the time, AMP said the portfolio review could result in the company not pursuing any transactions or divestments and doubling down on Mr De Ferrari’s turnaround strategy.
The turnaround plan has centred on simplifying AMP’s business, including the number of products it has on offer and an overhaul of its financial advice business which saw it controversially slice the price multiples the group pays to buy back planning practices.
The round of redundancies is consistent with that plan and investor pressure for AMP to keep a lid on costs.
AMP‘s latest investor report showed it had 5778 staff as at June 30, down from 6505 a year earlier. AMP Capital had 1378 employees as at June 30, up from 1327 12 months prior, while group office had 1102 staff versus 1111 a year earlier.
AMP’s shares closed 3.3 per cent lower on Wednesday at $1.305, outpacing a 2.3 per cent decline in the S&P/ASX200.
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