St James’s Place is reportedly planning to make approximately 500 redundancies next year as part of an extensive £200m cost-saving initiative.
An internal memo, which Citywire had access to, indicates that about one-sixth of the Cirencester-based wealth management firm’s non-financial adviser staff are expected to be dismissed in February, as reported by City AM.
The company announced over the summer its intention to reduce its annual cost base by £100m for the following two years, aiming for total savings of around £500m by 2030. Half of the savings are intended to be reinvested into the business, with the goal of doubling underlying cash profits by the end of the decade.
The forthcoming job cuts will not impact financial adviser partners at St James’s Place, who operate their own businesses under the company’s brand. The layoffs are more likely to affect the 3,200 employees working in areas such as administration and marketing, although specific departments and personnel have not been disclosed.
“Our cost reduction plans are focused on simplification and standardisation of processes within the business, but a programme of this size and scale will inevitably impact colleagues,” a spokesperson for St James’s Place commented. They added, “We have now begun consulting with colleagues to share our proposal for how this might impact roles, the outcome of which will not be known until next year.”
“In the meantime, we are fully committed to supporting all potentially impacted colleagues and to keeping them fully updated on key decisions and developments.”
When announcing the cost reductions earlier this year, CEO Mark Fitzpatrick said the cuts would be carried out in a “controlled” and “measured” manner. The firm is also focusing on revising its outdated bundled fee structure, which has attracted regulatory scrutiny this year, while aiming to trim expenditure.
Criticism has also emerged over some underperforming funds of the firm. St James’s Place last undertook job cuts in 2021, eliminating 200 positions, or ten percent of its workforce.
Despite a challenging start to the year, the company’s cost-saving measures combined with strong inflows have seen its share price climb, positioning it for a potential return to the FTSE 100 this week. Last week, the wealth manager closed three property funds due to insufficient investor interest and lingering effects of the pandemic.