Abrdn to pay bonuses despite redundancies

ABRDN has been forced to defend plans to hand out bonuses at the same time as slashing 500 jobs.

The FTSE 250 asset manager yesterday confirmed plans to sack back-office staff in London and Edinburgh as part of a £150m cost-cutting drive.

Despite the cutbacks, chief executive Stephen Bird said bonuses for fund managers and sales reps would remain, arguing people should be rewarded if they do well. He said: “It may be a bit counter-intuitive, but we are paying bonuses. Although the investment world is difficult, it’s important to recognise performing colleagues.” Staff bonuses were reinstated at Abrdn last year after they were axed in prior years because of poor performance.

Mr Bird said the fund group would be “appropriately paying those colleagues who are delivering for clients”.

Abrdn has struggled since it was formed through the 2017 merger of Standard Life and Aberdeen Asset Management.

Mr Bird, a former Citi banker, was drafted in to revive the poor share price, but it has fallen even further since he joined in 2020. Last year, the group cut £75m of costs from its bloated investment business but shares failed to react.

Mr Bird’s bonus fell by 60pc in 2022 from £800,000 to £331,000.

Abrdn unveiled the drastic new cuts after a worse than expected outflow of money from its funds. More than £12bn washed out of the group’s funds between July and December, which was more than analysts had expected.

Credit agency Moody’s downgraded Abrdn’s debt on Tuesday to a B grade citing “idiosyncratic weaknesses” arising from the amount of money flowing out of the group and poor performance.

Despite examining plans to sell its fund management division, Mr Bird said he was committed to the current structure. He said: “We are committed to the investment business, we can see a clear path to restoring the ability of it.”

The job cuts are designed to give Abrdn a smaller corporate back office and are unlikely to affect the day-to-day management of money.