GAM, the embattled Switzerland-based fund house, has said it will be reducing its overall headcount by 16% by the end of 2020.
The ongoing covid-19 crisis is forcing the troubled company to accelerate its plans to save more than €57m in costs over the course of this year. In 2019 GAM reduced its staff by 10% following a succession of disappointing results.
GAM's directors will each receive a 25% cut to their salaries.
Making GAM fit for the future is a clear strategic goal and in view of the current industry headwinds we are accelerating our plans in order to bring forward some of our longer term efficiency targets.”
Today's developments mark the latest in an ongoing period of difficulty for the Zurich-based fund manager. In January the company issued its third profit warning in two years, and in December last year the Swiss regulator proposed sanctions against GAM for not disclosing liabilities.
In today's statement, the company said it expects its employee headcount to fall from 817 in December 2019 to 680 by the end of 2020: "During March we completed a voluntary redundancy programme and we are planning a review of fixed compensation levels across the group to ensure appropriate alignment, particularly of senior non-investment roles."
"These measures are intended to manage costs while ensuring that the impact of our continuing targeted compulsory redundancy programme is minimised during the difficult covid-19 environment."
At the same time, GAM reported a 26% fall in AuM in its investment management arm in the 1Q2020. Total AuM fell from from £40bn to £30bn.
Peter Sanderson, Group CEO, said: "GAM remains committed to the strategy we announced in February and we have moved to accelerate the efficiency element of the strategy in order to respond directly to the pressures of the current market environment.
"Making GAM fit for the future is a clear strategic goal and in view of the current industry headwinds we are accelerating our plans in order to bring forward some of our longer term efficiency targets."
The company aims to return a pre-tax profit of €80m by the end of 2022 through cost-cutting and restructuring of the business. This morning Sanderson remained optimistic, adding, "I am pleased that we are now seeing early signs of recovery, both in terms of asset flows and also in the investment performance of our funds."