As part of its restructuring plan, Invesco (IVZ - Free Report) has eliminated nearly 1,300 jobs. The news was first reported by the Financial Times, which quoted the company’s CEO Martin Flanagan.
Specifically, Flanagan in an interview had stated that Invesco is on track to lower expenses by $400 million by this year end, and job cuts are part this strategy.
This followed the acquisition of OppenheimerFunds for roughly $5.7 billion in May, which made Invesco one of the leading global asset managers. As of Aug 31, 2019, the company’s preliminary month-end assets under management were $1.2 trillion.
The workforce reduction represents approximately 12% of the combined headcount of Invesco and OppenheimerFunds, per the staffing levels at 2018-end. Further, the job cuts include 850 employees from OppenheimerFunds’ Denver office, which deals with administrative functions.
Notably, earlier in May 2019, the company had announced its plan to add 500 jobs at its headquarters in Atlanta.
Amid a tough operating backdrop, lower interest rates and changing investor preference toward low cost passive investment strategy, Invesco is undertaking measures to maintain profitability. Additionally, global inorganic growth efforts will continue to support its financials going forward.
Shares of Invesco have lost 8.1% so far this year compared with 8.6% decline for the industry it belongs to.
Currently, Invesco carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Several other financial firms are also resorting to job cuts to control expenses and maintain profitability. In the recent days, Lazard (LAZ - Free Report) , Charles Schwab (SCHW - Free Report) and State Street (STT - Free Report) have announced similar actions as part of their cost saving initiatives.
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