Scottish financial services giant abrdn is to shut its Aberdeen office, staff were told this morning.
But there will be no job losses, with all employees – about 90 in all – asked to work from home instead.
Martin Gilbert, co-founder and former chief executive of Aberdeen Asset Management, which is now part of abrdn, called it a “sad day for the business”.
It comes as the company plans to axe about 500 jobs as part of a two-year “transformation programme”.
A spokeswoman for Edinburgh-headquartered abrdn told The Press and Journal the decision to close the Granite City base around the end of March was unconnected.
She added: “Like many companies, we have been rationalising our property footprint as working practices have evolved over recent years.
“There is no associated impact on jobs for our Aberdeen-based colleagues and we will continue to have a team based in the north-east.
“We are working closely with our colleagues to help them transition to the new working arrangements and they will continue to play an important role across multiple departments within the company.”
Abrdn owns the building, Prince Arthur House, it currently occupies at 10 Queen’s Terrace. Leaving it will mark the end of an historic brick-and-mortar link with Aberdeen.
The company’s vowel-light name is a nod to its Granite City roots – it was formed in 2017 through the £3.8 billion takeover of AAM by Edinburgh firm Standard Life.
Its plush offices in the west end of Aberdeen will be put up for sale at an, as yet, unspecified date.
Mr Gilbert, who led AAM through the takeover and was co-CEO of the enlarged company for a spell, said: “Clearly this is a sad day for the business to have to make these changes, a decision which I am sure will not have been taken lightly.
“It’s only natural to feel for the staff concerned, many of whom I know personally.
“Working from home, supported by the company is a different operating proposition but I hope it allows the team to continue to contribute for the long term in Aberdeen.”
He added: “I well remember co-founding Aberdeen Asset Management in 1983 and moving into the office at 10 Queen’s Terrace. It will always have a place in my heart.”
5,000-strong global workforce
London-listed abrdn employs about 5,000 people globally, including around 2,200 in Scotland.
Announcing the 500 job cuts alongside a trading update this morning, the company said it was targeting an annualised cost reduction of at least £150 million by the end of 2025.
It added: “This programme is designed to restore our core investments business to an acceptable level of profitability and allow for incremental reinvestment into growth areas.
“This marks another step on abrdn’s journey to align its resources and capabilities to meet client needs and reinforce areas of strength across the group.”
Abrdn’s “transformation” programme includes the removal of management layers, “increasing spans of control” and “further efficiency” in outsourcing and technology areas, as well as reducing overheads in group functions and support services.
The bulk of the savings will be in non-staff costs, the company said.
A spokesman for Abrdn said the job cuts were currently at the consultation stage and would take place over two years. It is too early to say where exactly the axe will fall, he added.
Why is abrdn looking to cut costs?
As of the end of last year, the company’s assets under management and administration (AUMA) totalled £494.9 billion after net “outflows” of £12.4bn.
This was down slightly from £495.7bn at the end of June.
The group’s investments arm “continued to face structural headwinds”, with high inflation and geopolitical uncertainty impacting client portfolios.
‘We will not rest’
Chief executive Stephen Bird said: “Market conditions have remained challenging for our mix of business, and this is reflected in our year-end AUMA, flow numbers, and margins. The board and I are committed to taking these significant cost actions now to restore our core investments business to a more acceptable level of profitability.
“Although our business model benefits from the diversification that comes from operating three businesses, we will not rest until all of them are contributing strongly to group profitability.
“The new transformation programme announced today, when completed, will deliver a step change in our cost to income ratio.”
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