Morningstar is to cut the global workforce of its ESG service provider arm Sustainalytics by 10-12% as it integrates the firm into its indexing business.
The decision comes after Morningstar said in June it would move to align more closely with Sustainalytics.
Amsterdam-based Sustainalytics employs over 1,800 people according to its website, meaning job losses could exceed 200.
A Morningstar spokesperson said: “As a part of this alignment, we are in the process of making adjustments to strengthen the financial footing of the business.
“Unfortunately, headcount reductions in addition to other expense reductions are part of the mix. While it has been a very difficult decision, we plan to reduce our global headcount at Sustainalytics by 10-12% to ensure we can get the business on healthy financial footing to be able to move forward and grow.”
Morningstar did not disclose which employees would be affected by the cuts.
Morningstar acquired a 40% stake in Sustainalytics in 2017 before acquiring it outright in 2020 after paying a lump sum of €55m and two further cash payments amounting to a total valuation of €170m.
Sustainalytics was one of the key contributors to Morningstar’s organic revenue growth in the second quarter of this year, which grew 12.7%, driven by strong demand for regulatory compliance solutions in Europe.
