Gartmore, the UK-listed fund manager which has suffered some key staff departures this year, has confirmed that it will cut around 10 per cent of its UK workforce, with the reductions focused on support staff.

The news is not unexpected: in November the firm announced it was embarking on a £10 million (about $15 milion) cost-cutting programme that would reduce its headcount, but numbers were not released at the time. It is now known that the job losses will total 35.

The need to embark on such a programme comes after high-profile departures at the firm. In November, the head of the firm’s European large cap fund management team Roger Guy announced his resignation from day-to-day fund management, following the departure of well-known traders Guillaume Rambourg and Gervais Williams earlier in the year.

But the reduction in headcount “is not really an issue to advisors”, says Darius McDermott, managing director of Chelsea Financial Services. He said the market had already understood there would be some outflows following the recent loss of an important manager, and that on balance cost reduction was actually good news for shareholders.

Fund management firms are vulnerable to the loss of star portfolio managers, as such news can result in significant outflows of assets under management. For example, in 2005 Schroders lost around one-third of its European equity assets, and in 2008 GLG lost around two-thirds of emerging markets assets, all following the departure of key employees, according to research from Morgan Stanley.

As well as implementing cost-cutting measures, Gartmore has also called in Goldman Sachs to carry out a strategic review, and is understood to view a merger or sale as a possible strategy.

“My best guess is either a slow rebuild or a strategic partner,” said McDermott, who said he viewed a 'smash and grab' takeover unlikely.

Among potential buyers mentioned in media reports have been Henderson Group (Gartmore’s second-largest shareholder), Threadneedle Asset Management and Newton Investment Management.

The firm has taken a number of measures to draw a line under recent troubles, such as introducing a new equity scheme in a bid to retain key employees and boost morale within the company.

The share price fell by 1.05 per cent yesterday, but McDermott said given it was still around the £1 mark after the recent equity dilution and staff losses, as long as the firm had other managers locked in he was “quietly confident” going forward.