3i cuts 15% of staff

3i is to axe 15 percent of its 600-strong workforce as part of a cost-cutting programme which “reflects significantly changed market conditions”.

“Although these decisions are clearly difficult for those affected, the outlook for markets is challenging. Our near term focus currently is on our £10bn of assets under management and preparing the business to take advantage of opportunities when markets recover,” said chief executive Philip Yea in a statement today.

Around 100 3i employees will be laid off, with the cuts, according to a Financial Times article, mainly focused on back office functions such as marketing and human resources, report. Approximately half of the cuts will be made from the firm’s UK operations.

The cuts follow November’s confirmation that the firm is closing its Silicon Valley office in Menlo Park, which had a staff of 13, as it further cemented its move away from the early-stage venture capital.

Guy Hands, head of buyout group Terra Firma, recently warned conference delegates that “the number of people employed in private equity will fall and those that remain will be paid substantially less”.

News of 3i’s cost-cutting measures, as well as this morning’s revelation that Nasdaq-listed buyout group American Capital will shed 19 percent of its US and European workforce, constitute the first significant signs of structured cost-cutting measures to hit the private equity industry. Until now it has seen only fragmented job losses in comparison to other areas of the financial services sector.

3i is listed on the London Stock Exchange and invests in buyouts, growth capital, infrastructure and quoted private equity. It has offices in 14 countries across Europe, Asia and North America.

In the last 12 months 3i’s share price has lost more than 60 percent of its value. At press time the shares had dropped a further 9.4 percent in today’s trading.