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US asset managers are launching their second wave of job cuts this year, with Charles Schwab, Prudential and Invesco each announcing cost controls amid a flight of customers into safer investments with lower fees.
Schwab and Prudential have in recent days divulged plans to cut about 2,000 and 240 positions, respectively. Invesco last month reported severance and reorganisation expenses of about $39mn in the third quarter of 2023 — about twice as much as expected — while posting a marginal drop in headcount.
Though not as substantial as widespread lay-offs in early 2023, the cost-cutting reflects the cautious outlook of asset managers after their hiring spree in 2021. They were then competing for talent in a roaring market but now face falling fees, outflows from active strategies and shrinking margins, said Chris Connors, principal at pay consultant Johnson Associates.
“I don’t think there’s too much of a sanguine outlook on 2024 in the traditional asset management space,” Connors said. “It’s more cautious and moderately pessimistic.”
Asset managers expect…
