AMP announces sweeping redundancies

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Michael Roddan

AMP has announced a sweeping program that will trigger redundancies of up to 20 per cent in both its AMP Capital asset management arm and in the AMP Australia wealth management division.

AMP is exploring options to spin off parts of the company.  Louie Douvis

Chief executive Francesco De Ferrari sticks to his “strategy” despite an ongoing portfolio review that could result in the sale or break-up of the 171-year-old firm.

In a note to AMP Capital employees on Wednesday, Mr De Ferrari flagged a shake-up of the division’s leadership and reporting lines, and warned that each member of AMP’s executive committee was examining its workforce for “efficiency opportunities”.

Along with the likely collapse of three, separate corporate functions teams in AMP Capital, AMP Australia and the corporate group, Mr De Ferrari said each member of the executive committee will work through other efficiency opportunities within their own teams.

“I will do this with input from the management team of AMP Capital,” he said.

“We will consider a range of measures and unfortunately this will lead to people impacts.”

One source inside AMP said the measures were aimed at securing workforce reductions as high as 20 per cent in some business units.

“I recognise that the last few months have seen significant change for the AMP Capital teams. Many of you have expressed your feedback directly to me, and I thank you for this.

“I understand that the changes announced today are a lot to take in and will prompt questions and I encourage you to speak with your leadership team member or people leader if you have any questions or feedback.”

Mr De Ferrari said he was “highly committed to implementing the strategy we announced in August” which involved repositioning the $192 billion asset management arm AMP Capital.

He said Boe Pahari would be “reinstating” his previous leadership team. Mr Pahari was last month demoted from AMP Capital chief executive to his prior role as global head of infrastructure equity and director of the North West Region following The Australian Financial Review’s revelations the company had settled a sexual harassment claim against him brought by a female employee.

There were no changes to the roles of Kylie O’Connor, head of real estate, Simon Warner, global head of public markets, and Craig Keary, managing director of Asia Pacific.

However, Josh Waterhouse has been appointed to the newly created role of director of strategy and transformation of AMP Capital, who will report to Mr De Ferrari.

Mr De Ferrari said the company’s three separate corporate functions teams caused “significant duplication and increased cost – and often its AMP doing business with ourselves”.

“So, we’re going to establish a single set of business services to deliver cost-effective, high quality support in the areas of finance, legal, risk and people. The new, combined business services teams will have KPIs aligned to the performance of the business units, keeping focus on client outcomes. “

From October 19, the following leaders and their teams will change reporting lines, retaining a dotted line into me as the acting CEO of AMP Capital. “Similar changes are being announced in AMP Australia this morning,” Mr De Ferrari said.

Last month, AMP chairman David Murray resigned following sustained shareholder pressure following the Financial Review‘s investigation into the company, along with AMP Capital chairman John Fraser, while Mr Pahari was sent back to his previous job.

New chairman Debra Hazelton has since launched a “portfolio review” which could lead to the full or partial sale of AMP’s operations.

AMP’s portfolio review over the next few weeks, conducted by Credit Suisse, Goldman Sachs and King & Wood Mallesons, will identify if any firm offers are better than the potential growth offered by Mr De Ferrari’s bogged-down turnaround strategy.

In August, AMP Australia chief executive Alex Wade resigned abruptly and without explanation. AMP Capital’s New Zealand boss, Bevan Graham, and head of distribution, Greg McMaster, have also quit the company.

Kristen Le Mesurier, AMP Capital portfolio manager and ethical investment specialist, left after the departures of Australian equities head Genevieve Murray, sustainable investment boss Emily Woodland and global chief investment officer of equities David Allen.

Michael Roddan is a senior companies reporter based in Sydney. He has worked as a business and economics reporter for The Australian and Business Spectator. Connect with Michael on Twitter. Email Michael at m.roddan@afr.com

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