Financial technology firm Iress is to cut ten percent of its headcount amid a restructuring effort that will entail a leadership reshuffle and the divestment of its the Managed Fund Administration and platform services.
Iress has been under pressure to boost profits and drive down costs in the wake of a post-pandemic macro-economic downturn. The firm has seen its market value decline from $3 billion in 2021, when it was the target for an acqusition by EQT, to $1.87 billion at current market prices.
Iress employs 2250 people worldwide and provides software and services for trading and market data, financial advice, investment management, mortgages, superannuation, life and pensions, and data intelligence.
In February, the firm posted a $52.7m net profit for 2022, down 28.6% from the previous year. It is increasingly being viewed as an acquisition target for buyout funds, attracted by its strong cashflow and underperforming assets.
The ten percent headcount cut will strip out $32 million in costs. Iress says that the MFA and platforms businesses, originally part of the acquisition of OneVue, is no longer strategically aligned to the future of the company which wants to be a neutral player in the platforms arena.
The company has booked a writedown of $123m to recognise the decline in value of underperforming assets, predominantly in the United Kingdom, where it has appointed a new CEO role, shifting Simon New from his post as chief commercial officer to oversee the business.
The restructuring is being driven by recently installed group CEO Marcus Price, who says: “At the core of Iress’ refreshed strategy is a strong focus on getting closer to our clients, and driving a higher level of accountability and transparency. The UK is a cornerstone of our global business - our mortgages and sourcing businesses are extremely strong and our ambition is to better equip our wealth and trading businesses for increased performance and delivery for our clients."
The new strategy will see Iress restructured along business lines, with each unit having access to dedicated technology teams as well as operational functions. The company also plans to reinvest in its core software and launch a new Innovations division to expand capabilities in future growth areas. The firm says this will include the development of "next-generation advice technology to support the growing unmet global advice demand, the exploration of data and AI opportunities and the continued expansion of Iress’ connectivity capabilities in wealth and trading".
Says Price: “I’m confident that the changes we’ve announced today will strongly position us for our next growth horizon, with a programme of clear and deliberate actions aimed at reinvigorating growth in our core businesses and delivering efficiencies that will improve our clients’ experience.”