Fund manager GAM is accelerating its cost-cutting programme in the face of a major drop in assets under management.

GAM’s assets under management dropped from over £109bn to just under £92.5bn in the first quarter.

The workforce, which stood at 817 at the end of 2019, is on course to be cut to 680 by the end of this year.

The company has also moved from a voluntary redundancy programme to a compulsory one as it seeks to improve efficiency.

While the cost-cutting began before the Coronavirus outbreak, the company says that the virus has led to a worsening of trading conditions although there has been a small pick-up very recently.

GAM said despite the virus, operations remain “resilient” with all employees now working remotely.

Even so the company says it needs to cut costs to get back to financial health.

Board directors have taken a 25% cut in remuneration and there will be cost cutting measures throughout the company.

In a statement to the stock market today the company said: “GAM believes that this acceleration of the efficiency programme is an important step to meaningfully increase operating leverage and support the group’s path to profitability.”

Peter Sanderson, group chief executive, said: “GAM remains committed to the strategy we announced in February and we have moved to accelerate the efficiency element of the strategy in order to respond directly to the pressures of the current market environment.

“GAM has not been immune to some of the toughest market conditions the industry has seen, and we saw our assets under management decline as a result of the Covid-19 crisis. We saw strong investment performance until the end of February, but this was impacted by the market environment during March. I am pleased that we are now seeing early signs of recovery, both in terms of asset flows and also in the investment performance of our funds.”

”Making GAM fit for the future is a clear strategic goal and in view of the current industry headwinds we are accelerating our plans in order to bring forward some of our longer term efficiency targets. We remain committed to the breadth of our distinctive investment management capabilities, our strong client service proposition and our PLF platform, which we believe are particularly well positioned to help clients actively navigate these uncertain times.”

Most GAM fund categories saw net outflows in the first quarter.