Alliance Trust is to wield the jobs axe as part of a major restructuring designed to improve investment performance.
The firm’s chief executive, Katherine Garrett-Cox, has also been demoted from the company’s main board as part of an overhaul of the business prompted activist shareholders.
The revamp announced by chairman Karin Forseke is one of the largest in the company’s 127 year history and follows a failed attempt to see off an attack by a shareholder Elliott Advisers in the Spring.
The Trust was given a year’s grace to improve its operational performance after agreeing a truce with Elliott just hours before the group’s AGM.
The firm has spent the past months consulting with shareholders on how the Trust should operate in future.
Reducing costs is a key element of the plan with a £6million savings target laid down for the coming year.
The company declined to say how many jobs will be cut but it is understood the figure is likely to be in the tens rather than hundreds
That figure will be achieved through a combination of operational efficiencies – the board is targeting reducing the ongoing charges ratio by at least 15 basis points to 45bps or less – and a reduction in the workforce.
The new structure will also see the Trust establish its first fully independent board consisting entirely of non-executive directors.
Ms Garrett-Cox remains as CEO of Alliance Trust, a director of the Alliance Trust Investments (ATI) business, but will no longer have a seat on the main board, a position she has held for the past eight years.
The other executive director, chief financial officer Alan Trotter, is leaving the business after five years.
The reforms will also see independent boards created for the main subsidiaries ATI and Alliance Trust Savings.
The Trust will sell off non-core assets – including legacy mineral rights – and focus its efforts primarily on the global equities market.
It has adopted the MSCI All Country World Index as a formal performance benchmark.
Management of the Trust’s portfolio will continue to be carried out-inhouse by ATI but there was a warning that future underperformance could lead to the function being outsourced to a third party a – move that would inevitably involve further job losses.
Ms Forseke said the past few months had been a “particularly challenging period” for the Trust but said she was confident it would emerge stronger.
“The actions announced today, taken together, represent some of the biggest changes in our history and are designed to further improve shareholder value,” she said.
“They will provide our shareholders with an investment trust which aims to outperform a clear benchmark from a cost base which is among the lowest in the sector.
“In addition we plan to continue to pay a progressive dividend and create shareholder value from our investment in two profitable subsidiary businesses, beginning in 2016.
“All of this is underpinned by the board’s commitment to a single figure discount.
These changes have the full support of the board. “