Financial technology firm Iress is set to reduce its workforce by ten percent as part of a restructuring initiative that includes a leadership overhaul and the divestment of its Managed Fund Administration and platform services.
Iress has faced mounting pressure to enhance profits and reduce costs amid a macroeconomic downturn post-pandemic. The company’s market value has dropped from $3 billion in 2021, when it was pursued for acquisition by EQT, to approximately $1.87 billion at present.
Employing 2,250 individuals globally, Iress provides a range of software and services related to trading and market data, financial advice, investment management, mortgages, superannuation, life and pensions, and data intelligence.
In February, the firm reported a net profit of $52.7 million for 2022, a decline of 28.6% from the previous year. Its strong cash flow and underperforming assets have made it increasingly appealing as an acquisition target for buyout funds.
The planned ten percent reduction in workforce is projected to eliminate $32 million in costs. Iress has indicated that the Managed Fund Administration and platform services, initially part of its OneVue acquisition, no longer align with its strategic vision of becoming a neutral player in the platforms sector.
Additionally, the company has recorded a writedown of $123 million to account for the decreased value of underperforming assets, primarily in the United Kingdom, where it has appointed a new CEO after shifting Simon New from his position as chief commercial officer to manage the business.
This restructuring is led by newly appointed group CEO Marcus Price, who emphasizes that the refreshed strategy centers on improving client relationships and enhancing accountability and transparency. The UK remains a key market for Iress, with strong performances in mortgages and sourcing, and the company aims to strengthen its wealth and trading segments.
Under the new strategy, Iress will be organized along business lines, ensuring each unit has dedicated access to technology and operational teams. The company also plans to reinvest in its core software and establish a new Innovations division to broaden capabilities in growth areas. This will include developing “next-generation advice technology” to meet the increasing global demand for advice, exploring data and AI opportunities, and enhancing Iress’s connectivity capabilities in wealth and trading.
Price expressed confidence in the announced changes, stating they will strategically position Iress for future growth and drive efficiencies that enhance client experiences.