Aussie AMP to axe 1,300 British jobs

TROUBLED financial services group AMP is to axe almost 30% of its British workforce next year if shareholders approve a A$10bn (£4bn) break-up of the Australian company.

Around 1,314 jobs will be shed at the British business by 30 June 2004, AMP revealed in its 576-page explanatory memorandum just released to shareholders.

The losses will come on top of more than 3,400 jobs already cut at the British operations - which include fund manager Henderson Global Investors and the life funds Pearl, NPI and London Life - since June last year.

The move is a further blow for the British arm, which is battling to retain key clients.

Its one profitable limb, Henderson, is reeling after Witan Investment Trust, which accounts for about £1.3bn of Henderson's £69bn in funds under management, last week dumped Henderson and announced plans to carve up its portfolio among various fund managers.

Witan created Henderson in 1934 and floated it in 1983 but has lost more than 33% on its investments during AMP's management over the past three years. The FTSE World Index has fallen by 23% during the same period.

AMP chief executive Andrew Mohl in Sydney said he was disappointed by Witan's decision but that it was too early to quantify the full impact.

Analysts say it will affect about £4m in fees for Henderson but could further dent investor confidence.

Mohl said AMP was open to offers for the British business, despite recently rejecting some as too cheap. But he insists a demerger is the best way to unlock value for shareholders. AMP's British business will list in London as a separate company, to be renamed HHG.

'We recognise there is more potential for a takeover of either company as a result of the demerger,' Mohl said. 'Ultimately, that is another reason why shareholders would benefit from the proposal.'

AMP's 989,000 retail shareholders - including 55,000 in Britain - will vote on the demerger proposal at a meeting on 9 December.

Roger Yates, chief executive of AMP's British operations, will hold an investor roadshow in Britain. Like Mohl, who held investor briefings in Australia last week, he could face a backlash from investors over the A$38m incentive payments to be divided among 160 AMP and HHG executives once the demerger takes effect.

Yates is in line for £1.1m if he remains in Britain with AMP for six months.