Ritika Janiya
With the announcement that AXA Investment Managers is to be bought by BNP Paribas, 2,400 staff are left wondering if their jobs are safe. The acquisition is likely to create one of the most powerful asset management firms in the world but could see the loss of jobs and restructuring of staff.
BNP Paribas will soon acquire AXA Investment Managers, which will shake the world of finance in France: creating, within one company, a huge €1,500 billion worth of assets. A new entity managing such a huge portfolio of public and private assets is going to be a heavy counterparty in markets. Such an exciting step can cast uncertainty upon 2,400 staff working within AXA’s walls.
Jobs on the Line
Whenever one company buys the other, they look for ways to trim costs. Generally, this translates to cutting jobs that are duplicated between the two companies. In this case, BNP Paribas and AXA have people engaging in similar tasks within the portfolios, technology, and operations levels. In order to save money, probably not all the workers will be needed by the new company.
Union Concerns
It’s not easy to cut jobs in France. Unions and employee representatives are already seeking answers to what the merger will mean for workers. Unions have been demanding details since July when deal rumors began circulating. Some senior staff, they point out, have already been axed and there are other indications, such as fewer workstations and cuts in the budget.
What Happened Before
AXA has cut jobs before. In 2023, it cut staff by some 100, mainly in the support functions and mainly in the transversal services. As some employees fear that this may just happen again, stress is running high, and many workers are being advised to join unions for protection against job loss.
Across the Ocean: A Different Story
The uncertainty has spread as far as to the employees at Pershing Square Capital Management based in the United States. Their boss, Bill Ackman, had devised some sort of grand idea for a new investment fund that was initially worth $25 billion. Things did not turn out quite that way. The fund’s value had dwindled to $4 billion before it fell to zero. Many people are now asking why this happened.
Lessons from Ackman’s Failure
Many theories have been forwarded as to the reasons behind Ackman’s failure. Some say he was overconfident—he thought social media followers would pony up for the fund. Others say he was desperate— investors were asked to get in, fast. But the biggest problem may have been the price: He wanted investors to pay more than the value of the assets prior to the fund’s listing, which is unusual. Most similar funds are usually priced lower than their assets, and investors can often buy them at a discount later.
The Bigger Picture
Liz Hoffman at Semafor suggested the price was the biggest problem. She showed that Ackman’s fund was at a much higher price compared to other similar funds, and it was supposed to be much bigger. That goes on to prove that sometimes, even the best of people make big mistakes when they reach too high.
Other Financial News
- Goldman Sachs Interviews: If you’re interviewing at Goldman Sachs and they ask about any concerns, a good response could be, “The only negative I can think of is that I’ll never get that feeling again of competing against Goldman and winning.”
- Brevan Howard Expansion: Brevan Howard has expanded its Abu Dhabi team to 100 people, including portfolio managers and cryptocurrency unit members.
Equities Traders: It has been a good year for equities traders, except at SocGen, whose shares fell due to some bad hedging decisions.
AI at JPMorgan: Junior bankers at JPMorgan are pushing the bank to use AI more in their jobs. They are very comfortable with AI, using it as an assistant or analyst.
CEO Changes: Schroders may want ex-UBS chief Ralph Hamers as their new CEO.
- HSBC Bonuses: HSBC has no intention of hiking this year’s bonuses. Outgoing CEO Noel Quinn said he had no regrets about his time at the helm of the bank.
Deals of this magnitude between such large businesses, like BNP Paribas and AXA Investment Managers, are at once exciting and worrisome. They may mean growth and the opening of new opportunities, but at the same time, they very often bring new challenges with them, especially for the employees. While these companies move ahead, many a pair of worker eyes will be watching, hoping their jobs are safe.
