Fund manager M&G is to cut staff numbers by 10% following a fall in pre-tax profits from £1.62bn to £1.149bn.

The company is undergoing a voluntary redundancy programme as part of a “five year transformation” scheme.

The company says the restructuring is necessary to improve profitability and to reflect changes in the investment market such as a shift towards passive investments.

It believes the longer-term outlok for savings and investment is positive but short term the spread of Covid-19 will cause uncertainty.

In line with changes in the market the company is to begin distributing a ‘PruFund-like’ proposition throughout Europe. The company demerged from former parent Prudential in October.

For 2019 the company saw a modest rise in Assets Under Management and Administration from £321bn to £352bn.

John Foley, M&G chief executive, said: "We have achieved much in 2019. As well as executing a successful demerger, we have maintained a clear focus on the day-to-day management of our business as indicated by a positive set of financial results in a challenging market.

“Adjusted operating profit before tax of £1,149 million and total capital generation of £1,509 million for the year represent a resilient performance in line with our expectations.

"Total assets under management and administration increased to £352 billion, largely reflecting investment returns over the year.  Across Savings and Asset Management, we saw modest total net client outflows of £1.3 billion.

“Flows into our UK Retail Savings business, including PruFund, largely offset flows out of our Retail Asset Management business. This demonstrates the value of our diversified business model and the appeal of our smoothed investment propositions.

"We have made a good start to life as an independent business and we are strongly positioned for growth. Our diversified investment capabilities, coupled with our client relationships in 28 markets, mean we are well positioned to meet the growing global demand for savings and investment solutions, supported by favourable long-term economic and social trends that offer growth opportunities for many years to come."