Octopus Investments is set to cut around a fifth of its workforce as it accelerates its adoption of artificial intelligence – a move that reflects the rapid change taking place across the wealth management industry.
The City-based firm, which manages almost £15bn of assets, is understood to be putting around 130 jobs at risk of redundancies, mostly in back-office roles. With just over 600 employees, the restructuring represents a significant change in the way the company operates as it aims to streamline processes and modernize its infrastructure.
The cuts are part of a broader strategy to invest more in technology, particularly AI, which is increasingly being used to automate routine tasks, improve efficiency and reduce operating costs in financial services.
The move underscores how quickly AI is transforming the financial sector, particularly in areas such as administration, compliance and reporting, where repetitive processes are well suited to automation.
Wealth managers are among the fastest adopters of technology, using AI tools for data processing, client onboarding and portfolio analysis. As a result, roles that were once labor intensive are being reduced or redefined.
Octopus Investments said the decision was necessary to ensure the company remained competitive in a rapidly changing environment.
“We have made the difficult but necessary decision to ensure we are a simpler business that can respond to the pace of change,” a spokesperson said, adding that affected employees would be supported in finding new roles both within the wider group and externally.
The restructuring is not an isolated case. Across the city and around the world, financial institutions are rethinking their staffing structures as AI capabilities expand.
HSBC, for example, is reportedly considering cutting up to 20,000 jobs in the coming years, driven in part by the efficiencies offered by AI.
The shift reflects a broader industry realignment as companies balance cost pressures with the need to invest in new technologies that can improve performance and customer service.
Despite the job cuts, Octopus Investments remains financially robust. The company reported a 10.3 percent increase in net profit to £76.7 million in 2024 and revenue increased to £225.7 million.
It is one of the most profitable divisions within the larger Octopus Group, which also includes companies such as Octopus Energy and Octopus Money.
The decision to reduce the workforce is therefore not due to financial distress, but rather a strategic effort to adapt to technological change and maintain competitiveness in the long term.
The company has faced criticism in recent years over the fees it charges for certain investment products.
Its flagship venture capital fund, Octopus Titan VCT, agreed to cut management fees by 17 percent last year, while the firm also earned significant fees from managing private investment vehicles, even during periods when those funds reported losses.
These issues have increased pressure on the company to demonstrate efficiency and value to investors, a factor that may also be influencing its push toward automation.
For employees, the restructuring highlights the growing influence of AI on employees, particularly in financial services.
While front office and customer positions are less directly affected, back office functions are becoming increasingly automated, reducing the need for large operational teams.
At the same time, new roles are emerging in areas such as data science, AI development and digital strategy, signaling a shift in the skills required across the industry.
As AI evolves, asset managers will likely face further pressure to adapt their business models, balancing efficiencies with the need to retain expertise and maintain client trust.
For Octopus Investments, the current restructuring represents a significant step in this transition, reflecting both the opportunities and challenges of technological change.
Similar moves are expected across the city as companies try to position themselves for a future in which automation plays an increasingly central role in financial decisions and operations.
