Amvescap to cut another 500 jobs

Shares in Amvescap, the US-focused investment manager listed in London, shot up more than 16 per cent yesterday after the group said it was cutting 500 more jobs.

The City hailed the news as the first evidence Amvescap is willing to take an axe to its bloated cost base, which has exacerbated the problems caused by the bear market.

Charles Brady, executive chairman, said the company aimed to save £100m in annual costs, about 10 per cent of the total, by the end of next year. As part of the efficiency drive, 500 jobs will go across the group's operations. More than three-quarters of the business is in the US and global staff numbers have fallen from 8,900 at their peak to 7,900 now.

Unveiling results for the three months to 30 September, Mr Brady said: "We have had a steady drop in the markets over the last two years, and in the third quarter they simply tanked. The quarter was about the worst any of us has seen in our business careers. All you can really do is keep your head down and cut expenses."

The group will take an exceptional charge of about £40m to cover redundancy costs. Each of the group's businesses has been charged with finding savings, and head office technology spending will also be squeezed.

Amvescap, whose brands include Invesco and AIM, said funds under management averaged $348.4bn (£225bn) in the quarter, 10 per cent less than the previous three months.

The figures were not as bad as some had feared, though, with less money taken out of its mutual funds in the US and a tighter rein on costs than analysts had been forecasting. The net outflow from its funds, about 1 per cent of the total, was better than many of its rivals.

Amvescap shares have lost 78 per cent of their value since the peak of the retail investment boom, but jumped 53.5p to 384p yesterday.