IGM Financial ‘reducing complexity’, adding AI

Winnipeg-based IGM Financial will undergo a restructuring as it increases artificial intelligence use.

The company announced Wednesday it’ll record a one-time charge of roughly $95 million in its second quarter, which includes severance payments. The firm didn’t make a representative available for an interview.

In an email, a spokesperson said IGM Financial is taking “thoughtful steps” to simplify operations.

“This is about reducing complexity and increasing agility to ensure we’re well-positioned for the future,” the spokesperson’s statement says.

They don’t detail how many workers may be laid off.

IGM Financial umbrellas IG Wealth Management and Mackenzie Investments. It employs more than 3,500 people globally.

IGM’s multiyear strategy to simplify operations could result in approximately $70 million in annualized savings by the end of 2028, IGM Financial said in its news release.

It co-launched a joint US$150 million fund in May that backs artificial intelligence companies focused on financial services, among other sectors. Partners in the fund — including parent company Power Corporation of Canada and sister firm Great-West Lifeco Inc. — will receive early exposure to innovative AI companies, a May release notes.

IGM Financial counts approximately $338 billion in total assets under management. At close of trading Thursday in Toronto, its share price was $81.72.

IGM Financial’s news release outlines a plan to consolidate team structures, streamline workflows, train employees — including through IGM AI Academy — and hire in areas such as AI leadership and data engineering.

Artificial intelligence has already been introduced in several ways, including through meeting preparation and automating high-volume tasks, a recent IGM Financial investor presentation says.

The company’s announcement came a day after Robinhood said it would axe 10 per cent of its workforce. The cuts amount to around 290 jobs.

Robinhood, like IGM Financial, cited more efficient operations.

“There’s nothing new here. Companies, they are motivated to make things more efficient,” said Wenxi Pu, a University of Manitoba business professor who studies AI.

“With the new cutting-edge technologies, it makes sense to restructure according to what AI can do.”

However, replacing humans with AI can be a “strategic mistake,” Pu said. He recommended augmenting human workers with the new technology.

IGM Financial seems to indicate, by its June news release, it won’t be replacing most of its workforce, Pu added.

Companies must think about their talent ladder: entry-level jobs can be at risk with AI introduction, but workers need to start somewhere, the professor said.

IGM Financial is set to change leadership in July. Damon Murchison, president of IG Wealth Management, will continue in his role while also becoming president and chief executive of IGM.

The company’s current president, James O’Sullivan, will become president and CEO of Power Corp.

The $95-million charge will include incentive programs related to the CEO transition, according to IGM’s release.

“We are building an AI-enabled organization that enhances, not replaces, the trusted relationships at the core of our business,” O’Sullivan is quoted saying in the release.

gabrielle.piche@winnipegfreepress.com