The NZ-based operations of AMP could be hit by planned company-wide job cuts revealed by the ASX-listed firm last week.
In a note to AMP employees last week, chief executive, Francesco De Ferrari, flagged a business restructure that could see the workforce shrink by up to 30 per cent in some divisions, according to Australian media.
AMP confirmed in a statement it had “made changes to its teams that will centralise some business services”.
“Our focus is on continuing to reshape the organisation to drive efficiency and support the delivery of AMP’s strategy to become a simpler, client-led organisation,” the AMP statement says.
Press across the Tasman reported the changes would affect both AMP Capital and the recently formed AMP Australia unit, which bundles up the group’s wealth management, financial advice and banking businesses.
However, it is understood the business services rationalisation process would take in all AMP global operations including NZ.
AMP Capital NZ is based in Wellington with a staff of 20 plus.
The NZ wealth management business (covering advice, KiwiSaver and corporate superannuation products), which employs about 350 people, is now largely scattered across suburban commercial locations and homes after the company announced it would close down its central Auckland and Wellington offices in June. An AMP NZ wealth spokesperson said the planned job cuts “absolutely don’t apply to us”.
In June head of the AMP NZ wealth business, Blair Vernon, said the central city shutdown had been planned for about two years but was fast-forwarded by COVID-19 lockdowns. However, the offices remain open pending lease run-downs with some AMP staff still in situ.
Vernon was seconded in August to head AMP Australia after the shock departure of incumbent, Alex Wade. Wade had served only 10 months in the role.
In the interim, Jeff Ruscoe, AMP NZ chief client officer, has replaced Vernon.
Meanwhile, AMP Capital NZ chief, Bevan Graham, also resigned in August – effective next January – in the midst of a corporate shake-up in the Australian funds management group and a regime change at the parent entity board.
Newly installed AMP chair, Debra Hazleton, announced a company-wide “portfolio review” early in September, after a receiving a flood of “unsolicited interest in its assets and businesses”.
“The Board has therefore decided to undertake a portfolio review to assess all opportunities in a considered and holistic manner, evaluating the relative merits as well as potential separation costs and dis-synergies, with a focus on maximising shareholder value,” AMP said in the September statement.
Last week Moody’s Investors Service followed the lead of fellow credit ratings agency, Standard & Poor’s, in downgrading AMP.
Moody’s moved the rating for both AMP Group and its banking division down a notch from A3 to Baaa2, citing “sustained reputation damage which continues to affect the business and its operations”.
However, the ratings agency had lifted the outlook for AMP Group from ‘under review’ to ‘stable’.
“The negative pressure on superannuation fund inflows and margin compression will likely constrain the group’s revenue generation and profitability,” the Moody’s release says. “While AMP’s transformation project should ultimately reduce costs and improve efficiency, the near-term investment needs will mean that improvements to net profits are likely to be limited in the next two years.”
Noting the downgrade, an AMP statement lodged with the ASX says the company had “a strong balance sheet and capital position, with surplus capital (above the Board target capital level) of A$1.4 billion as at 30 June 2020.”
The AMP share price has plateaued at about A$1.30 following a brief spike to A$1.50 post the ‘portfolio review’ news early in September.