A Leading Wealth Management Firm To Lay Off One-Sixth Of Its Workforce

St. James's Place, a leading wealth management firm based in the UK, has proposed big layoffs in the new year. The firm designs both funds and portfolios, as well as provides financial advice and contracts connections with external financial managers. Citywire first reported the cuts from an internal memo circulated by St. James's Place. 500 jobs are on the line, with plans to be made redundant in 2025.

None of the cuts will apply to the 4,800 or so financial advisors that operate their own firms in the UK under the St. James's place name, but will instead affect the 3,200 members of the company's corporate staff. While it is not yet known which divisions will feel the axe most sharply, the cuts will impact 16% of the workforce at St. James's Place.

The planned cuts are part of a larger attempt to cut operating costs at St. James's Place, which trades as SJP. Per the company's website, St. James's Place is "committed to delivering value for our clients and our shareholders alike." Delivering value to employees may not be part of the mission statement, and neither is the fee scandal the layoffs may be in response to.

Mark FitzPatrick, former head of Prudential PLC, took over as CEO of St. James's Place in 2023. In his July 2024 half-year results report, FitzPatrick called out the "robustness" of the St. James's Place business model, as well as highlighted the overall strength of the investment decisions by the company made.

However, shares of SJP have been volatile in 2024. In February 2024, shares plummeted 30% in response to the company's reported yearly losses in 2023, and the lessened dividends coming their way. But in July 2024, SJP shares soared after FitzPatrick announced strong returns and a "refreshed strategy" includes FitzPatrick's plans to cut 100 million pounds (about 127 million in U.S. dollars) from base business costs by 2027.

FitzPatrick's November 2024 memo puts a new, if still vague, 2025 deadline on some of those deep cuts. While shareholders may sleep a little easier, corporate employees may face fresh worry heading into the new year. (In a similar boat? Read about five things to do after getting fired)

News of cuts may be part of larger cost-saving measure for St. James's Place, as well as a response to recent scandal. While financial management and juicy scandals go together like, well, fund managers and insider trading, the scandal at St. James's Place is significant, rather than just salacious. In fact, FitzPatrick was installed at the company in part to help strengthen its name, in light of regulatory response to the scandal.

In September 2024, a law firm brought a suit with 15,000 claimants against St. James' Place. The issue: the firm charged an advice fee meant to cover a yearly review meeting, which many clients never received. In response, the company reserved a 426 million pound provision (around $541 million) to refund wronged customers, took a killing on its yearly loss report, and then suffered the wrath of dividend-denied shareholders.

However, that July 2024 announcement of pending cost cuts inspired a stock price spike higher than St. James's Place had seen since 2008. Hundreds of jobs lost for another quarter of corporate gain may be in the offing for Saint James's Place, as well as other such struggling institutions come the new year. For example, one such stateside retail chain is closing hundreds of stores to deal with a parent company's bankruptcy, and another major retail chain plans to close stores and lay off workers while in an attempted turnaround.