Job cuts at private equity giant
More than 160 jobs are being axed at private equity giant 3i after the firm revealed plans to save up to £45 million a year in costs.The owner of the Agent Provocateur lingerie chain said it was cutting global staff numbers by a third as part of a major turnaround plan.
3i - the UK's biggest listed private equity firm - will close its office in Birmingham within six months under the restructure.
New chief executive Simon Borrows said a further five offices overseas will be shut, reducing the number to 13. The company declined to say how many of the 160 job losses will come from the UK, but it is understood some support staff in its head office in London are at risk.
3i, which also owns fashion chain Hobbs, retailer Go Outdoors and restaurant chain Giraffe, has seen its share price almost halve in recent months and previous boss Michael Queen stepped down earlier this year.
Mr Borrows said his plans would get 3i back on track by removing complexity and making it more dynamic. He added: "The business today is too decentralised and lacks focus and consistency. 3i will be a fitter and more focused organisation."
Shares rose 3% on Friday. Jonathan Jackson, head of equities at Killik & Co, said: "This makes positive reading and should be well received by shareholders. The big issue of misalignment between low external fee income and high operating costs is being addressed."
3i is one of the most famous names in British venture capital, having backed household names such as Interflora and Pinewood film studios. Set up in 1945 as Government agency the Industrial and Commercial Financial Corporation, it played a key role in the rebuilding of business after the second world war and was privatised in 1987.
The group has moved to cut its debt mountain in recent years but faces constraints because the City regulator insists it hold capital proportional to its operating costs. Shareholders have recently criticised the company for a lack of focus.
The group said it would close offices in Barcelona, Shanghai, Hong Kong, Copenhagen and Milan, while other overseas offices would see cut-backs.
Mr Borrows said his plans would get 3i back on track by removing complexity and making it more dynamic. He added: "The business today is too decentralised and lacks focus and consistency. 3i will be a fitter and more focused organisation."
Shares rose 3% on Friday. Jonathan Jackson, head of equities at Killik & Co, said: "This makes positive reading and should be well received by shareholders. The big issue of misalignment between low external fee income and high operating costs is being addressed."
3i is one of the most famous names in British venture capital, having backed household names such as Interflora and Pinewood film studios. Set up in 1945 as Government agency the Industrial and Commercial Financial Corporation, it played a key role in the rebuilding of business after the second world war and was privatised in 1987.
The group has moved to cut its debt mountain in recent years but faces constraints because the City regulator insists it hold capital proportional to its operating costs. Shareholders have recently criticised the company for a lack of focus.
The group said it would close offices in Barcelona, Shanghai, Hong Kong, Copenhagen and Milan, while other overseas offices would see cut-backs.
© 2013 Press Association