IG Group (LON: IGG) is expecting to reduce its headcount by about 300, which amounts to 10 percent of its total workforce at the end of fiscal year 2023. It came as the result of a review of the company’s cost-efficiency opportunities.

A Massive Cost-Saving Drive by IG

Announced today (Tuesday), the brokerage group expects to deliver full run-rate cost savings of £50 million per year. It is anticipating structural savings of £10 million in FY24, £40 million in FY25, and £50 million in FY26.

The brokerage group further highlighted the anticipations of additional savings of £10 million in FY24 resulting from a reduction of variable costs. The cost reductions reflect softer market conditions disclosed in Q1 that continued through Q2, resulting in total yearly savings of £20 million.

Headquartered and listed in London, IG reported a total revenue of £242.9 million in the first quarter of the ongoing fiscal year. Although revenue from derivatives, stocks, and other investment products increased significantly, its interest income took a hit.

The decision for the cost-cutting measures was taken when IG stares were plummeting on the stock market. At the market's close on Monday, IG's stock was trading at £6.16, marking a 21.38 percent in value for this year alone. Even when compared to its performance over the past five years, the returns have remained flat.

The IG stock peaked at £9.5 in April 2021 following the impact of the Coronavirus-induced volatility in the global stock markets.

Building a Leaner Business

With these cost reductions, IG is simplifying and streamlining the business, positioning itself for further growth, the official press release highlighted.

"We want to position IG Group as a lean fintech company, and today's decisive actions ensure a strong platform for future growth," Charlie Rozes, the acting Chief Executive Officer of IG, said.

"We will continuously evaluate and pursue cost-efficiency opportunities to create a more agile and scalable organization. Full support will be provided to our people throughout this process, and while these decisions are not easy to take, they will ensure the business is well-positioned for continued long-term success."