St James’s Place to axe 200 jobs after Covid hit to profits

St James’s Place, the UK listed wealth manager, plans to axe 200 jobs following an almost 40% drop in pre-tax profits last year.

In final results published on 25 February, SJP reported a pre-tax profit of £426.4m for 2020, down from £708.9m at the end of the previous year. However, funds under management rose during the period to £129.3bn, a 10.5% increase from the end of 2019.

Following an “extraordinary year”, chief executive Andrew Croft said the wealth manager would be “simplifying” its operations by removing duplication of work and stopping those tasks that are “now no longer needed”.

As a result, Croft said this would result in the loss of around 200 jobs, achieved via voluntary redundancies where possible.

READ St James’s Place pulls in £2.3bn during final quarter of ‘extraordinary year’

“We hope, however, that a combination of filling vacant roles across the business and a voluntary redundancy programme in appropriate areas, will mitigate the number of individuals impacted by this difficult decision,” Croft said.

In addition to announcing job cuts, Croft said the wealth manager would target growing funds under management by more than £200bn by the end of 2025.

“In the near term, whilst we are encouraged by the moderate growth in new business we have seen in the early weeks of 2021, the external environment remains challenging,” said Croft.

“There remain difficult months ahead but as Covid 19 restrictions ease, we are hopeful there will be an economic recovery and we will see a return to more normal growth in new client investments.”

The job cuts come after SJP was targeted by activist investor PrimeStone Capital last year.

The Mayfair-based investor wrote an open letter to the board in October claiming the company had “fallen short on delivering meaningful shareholder value over the last five years”.

PrimeStone, which owns about 1.2% of SJP, also singled out its “overly generous” compensation structure, claiming it has more than 120 employees with “head of” in their job titles.

The investor called pay at the firm, where 25% of SJP staff earn more than £89,000 a year, a “staggering statistic”, one which it says puts 600 SJP employees among the UK’s top 4% of earners.

To contact the author of this story with feedback or news, email David Ricketts