‘They’ve treated people like dirt’: Equity group layoffs at $135 billion BCIMC raise questions about morale
The BC Investment Management Corp., one of the country’s largest pension managers, has laid off “about 20” of its investment professionals, a mix of analysts and portfolio managers who largely worked in equities.
The layoffs, most of which took place in February and affected approximately half of the equities group, have according to sources hurt morale at the organization, which manages $135 billion of assets.
“People are very concerned about their jobs,” said one observer.
Part of the problem was the sudden, and seemingly chaotic way in which the layoffs were carried out.
On the day of the layoffs, a source said, emails were sent advising some staff to go to one location and the rest to another, to hear the good or bad news. But some wound up in the wrong room and had to be pulled out and redirected before the news was delivered.
The decision to cut employees was made a few days after the manager’s human resources department issued a note advising assistance was available to those feeling stressed.
For some employees, stress reduction has apparently come from venting their frustration on the website Glassdoor, a job site that contains reviews of employers. “Terminations and re-orgs are now the status quo,” said a recent anonymous post.
The layoffs have left some wondering how replacements will be found given the relative lack of money management talent in Victoria.
BCIMC has stated its plan is to internalize active management on a global basis, and the investment managers needed — who would most likely have to be recruited from Calgary, Toronto or Montreal — may rethink given what’s happened.
“In a nutshell they’ve treated people like dirt,” noted the observer, adding the approach was “different” from that employed by former chief executive Doug Pearce who left in mid-2014. “Doug had a different philosophy, one that was more of a cultural fit with Victoria.”
One pension fund consultant said if such employee cuts were made by a private sector manager, the clients “would have responded and fired the manager. But in bcIMC’s case, the clients are captive.” In all, bcIMC has 31 institutional clients with almost 98 per cent of the assets being either public sector pension funds or from “government bodies.”
“It’s (essentially) part of the government, but has now added this Wall Street mentality. What’s the board doing?” asked the consultant.
The layoffs are the latest in a series of changes that kicked off almost four years back when Gordon Fyfe replaced Pearce as chief executive. Fyfe was the former chief executive of the $90 billion PSP Investments.
Over time, Fyfe has hired a number of former PSP staffers: of the nine members of its executive management team, three came from PSP, five are long-term employees and one came from a fund outside Canada.
“I think they wanted new people, a bit of a housekeeping exercise,” is how the observer described the personnel and structural changes.
The pension fund’s stated goal of becoming “an in-house asset manager that uses sophisticated investment strategies and tools,” has meant a greater allocation to private equity, mortgages, real estate, renewable resources and infrastructure. In 2016 it launched QuadReal, a real estate manager.
For whatever reason, the fund’s three-year plan of internalizing the investment management and cutting ties with external managers has progressed more slowly than expected.
Last fall, Daniel Garant, a former PSP first vice-president, came on board, an arrival that coincided with the departure of Bryan Thomson, senior vice president of public equities.
Garant is now senior vice-president public markets.
We sought comment from bcIMC on staff cuts, severance costs, morale and progress on the plan to internalize investment management.
“I’m respectfully declining your request as BCI does not publicly comment on or discuss personnel matters,” a spokesperson said.
Financial Post