Referring to “significant mid-term uncertainty and volatility”, Nordea Asset Management on Thursday said it intends to reduce its 242-people strong workforce in Luxembourg as part of a wider plan that involves redundancies in Denmark and Sweden along with the grand duchy.
Meanwhile British investment firm M&G, which runs its continental European investment business from Luxembourg, on Thursday announced a voluntary redundancy programme that aims to save some 200 million pounds in the next two years. The British firm employed more than 160 people in Luxembourg at the end of 2021.
Scandinavian investment firm Nordea, which held 117 billion euro in assets under management in Luxembourg - about one third of its total - at the end of 2021, cited “several drivers of uncertainty” as reasons for the job cuts, including inflation, interest rates, recession risks and geopolitical tension.
“The reductions will take place in Denmark, Sweden and Luxembourg, but we do not comment on the number of impacted employees,” the firm said in an email to Investment Officer.
‘4 to 5 percent’ of workforce
At Nordea, the cuts will affect about 4 to 5 percent of its 900 strong workforce in the three countries, Nordic investment news service AMWatch reported, suggesting that between 36 and 45 jobs are to be axed in the three countries.
“The reason for the adjustment is the need to adapt to the market environment, because macroeconomic uncertainty remains high, and the asset management industry is facing significant mid-term uncertainty and volatility,” Nordea said.
With 359 billion euro in assets at the end of last year the firm still was the biggest among Nordic asset managers. Its AuM declined 12 percent last year. Its Luxembourg unit, Nordea Investment Funds SA, has reported a workforce of 242 people for the end of 2021. That is up from 190 at the end of 2018.
M&G on Thursday reported a 7.6 percent drop in assets under management, driven by adverse market movements, to 342 billion pounds (385 billion euro), down from 370 billion pounds in December 2021.
“To meet our 200 million pound cost savings target we will improve client journeys through digitalisation; remove management layers and streamline governance, enhancing our approach to shared services and outsourcing; and optimise our operating model,” M&G group chief executive Andrea Rossi said in a statement.
In Luxembourg, Nordea still is subject to legal proceedings involving redundancies stemming from its 2018 sale of part of its private banking business to UBS Luxembourg. A group of four private bankers was forced out following that transaction, a person familiar with the case said. The company declined to comment on this legal action.