Perpetual cuts nearly 300 jobs in a large-scale group restructure
Fund manager Perpetual has cut its headcount to 1053 in response to uncertainty and volatility in global markets, Geoff Lloyd, chief executive, told the Investorfirst Securities conference in Sydney this week.
“I am not looking in the near term for markets to recover in any significant way and neither do I think investor confidence is going to return in any significant way, so Perpetual is not playing or waiting for that,” said Lloyd.
The proposed restructure was announced in June and Perpetual aims to cut a total of 580 jobs in an attempt to save $50m in pre-tax savings a year by 2015.
However, Lloyd claims this is not just about cost cutting: “It is actually about changing the operating model of Perpetual to achieve profitable growth. At the core of our strategy, I wanted Perpetual to be a smaller, simpler, more profitable business,” he said.
Most of the redundancies have come from the mortgage lending division, which Perpetual sold to concentrate on its funds management, advice and corporate trust businesses.
Perpetual has also outsourced some IT functions to Fujitsu Australia as part of a major technology transformation project; this is expected to lead to about 100 additional job losses.
Perpetual escaped a “second strike” against its executive pay policy and avoided a potential board spill when 90 per cent of shareholders supported its executive remuneration report earlier this month. Lloyd and other senior executives took a decrease in salary and company-wide bonuses have been culled.
With global market conditions proving volatile, Lloyd said smaller boutique investment houses would struggle to survive. “There are currently more than 200 Aussie equity funds in the market. That is way too many,” he said.
However, Lloyd said Perpetual’s strategy “continues to be about acquiring and organic growth,” and that to increase its private wealth division, it may consider buying financial advice businesses in the future.
