Octopus Investments is cutting a fifth of its workforce amid an AI-driven overhaul

Octopus Investments will cut about a fifth of its workforce as it accelerates the adoption of artificial intelligence, a move that reflects the rapid change underway in the asset management industry.

The City-based firm, which has assets of around £15 billion, is understood to be putting around 130 roles at risk of sale, mainly in office roles. With just over 600 employees, the restructuring represents a major change in the way the business operates, as it aims to streamline processes and modernize its infrastructure.

The reduction is part of a broader strategy to invest more in technology, especially AI, which is increasingly being used to automate routine tasks, improve efficiency and reduce operating costs across financial services.

The move underscores how rapidly AI is reshaping the financial sector, particularly in areas such as governance, compliance and reporting, where repetitive processes are well-suited to automation.

Asset managers have been among the fastest adopters of the technology, using AI tools to manage data processing, client onboarding and portfolio analysis. As a result, roles that used to require employees are being reduced or redefined.

Octopus Investments said the decision was necessary to ensure the business remains competitive in a rapidly changing environment.

“We have made a difficult but necessary decision to ensure that we are a flexible business that can cope with the pace of change,” said a spokesperson for the group, adding that affected employees will be supported in finding new roles within the wider group and externally.

Restructuring is not a one-off situation. Across the City and around the world, financial institutions are reassessing their workforce structures as AI capabilities expand.

HSBC, for example, is reportedly considering up to 20,000 job cuts in the coming years, partly driven by the breakthroughs AI offers.

The change reflects a broader industry restructuring, as firms balance cost pressures with the need to invest in new technologies that can improve operations and customer service.

Despite the job cuts, Octopus Investments remains financially strong. The company reported a 10.3 percent increase in revenue to $76.7 million in 2024, with revenue rising to $225.7 million.

It is one of the most profitable divisions within the wider Octopus Group, which also includes businesses such as Octopus Energy and Octopus Money.

So the decision to downsize is not driven by financial stress, but a strategic effort to adapt to technological change and maintain long-term competitiveness.

The company has faced some criticism in recent years over the fees charged on certain investment products.

The flagship venture capital trust, Octopus Titan VCT, agreed to cut management costs by 17 percent last year, while the company has also made huge profits by managing private investment vehicles, even at times when those funds reported losses.

These issues have added pressure on the business to demonstrate efficiency and value to investors, something that may impact its push for self-employment.

For employers, the restructuring highlights the growing impact of AI on white-collar roles, particularly in financial services.

Although office and customer-facing positions are not immediately affected, office tasks are becoming increasingly automated, reducing the need for large work teams.

At the same time, new roles are emerging in areas such as data science, AI development and digital strategy, suggesting a shift in the types of skills needed across the industry.

As AI continues to evolve, asset managers are likely to face increased pressure to adapt their business models, balance efficiency gains with the need to maintain technology and maintain customer trust.

For Octopus Investments, the current restructuring represents an important step in that transition, reflecting both the opportunities and challenges brought about by technological change.

Across the City, similar moves are expected to follow, as firms seek to position themselves for a future where automation plays a key role in decision-making and financial operations.