ZURICH (Reuters) - Swiss asset manager GAM Holding (GAMH.S) is cutting around 10 percent of its staff from its fixed income and equities teams in a shake up of its embattled business under its new chief executive.
David Jacob took over as interim CEO earlier this month at the company, whose stock has nosedived after it suffered billions of francs in outflows and the aftermath of a botched acquisition.
Jacob said repositioning GAM and improving efficiency and profitability required some “tough decisions,” according to an internal memo reviewed by Reuters.
Under the changes, GAM will merge its European equities operations into one team while its fixed income operations in London, Zurich and New York will also be combined.
“By consolidating some teams we will be better able to deliver scalable products to our clients worldwide,” Jacob wrote in the memo.
“This will mean that a number of current investment roles will become redundant.”
No figure was given in the memo, which said only that consultations with affected staff was now underway. According to industry sources the job cuts could affect around 20 out of the 188 people employed in these areas.
A GAM spokesman declined to comment on the figure.
GAM’s share price has fallen by 62 percent this year as the asset manager has been hit by a string of difficulties, although
they recovered slightly after U.S. investor Mario Gabelli increased his holding to more than 3 percent earlier this month.
Assets under management suffered a 17.7 billion Swiss franc hit in the third quarter due to slumping markets. The suspension of absolute return bond fund (ARBF) director Tim Haywood during a misconduct investigation may also have prompted some investors to withdraw funds
Before that, the company took a 59 million franc impairment charge on its acquisition of British hedge fund Cantab Capital Partners, writing down more
Reporting by Oliver Hirt, Writing by John Revill; Editing by Louise Heavens