GMP Capital Inc. cut 15 jobs yesterday and shunted 51 key support personnel to its wealth management arm, Richardson GMP (RGMP), to reduce expenses in the face of challenging business conditions.

Over the past 12 months, GMP Securities has eliminated 52 positions, which represent a 16% reduction in the total headcount.

Yesterday’s cuts were GMP employees who didn’t fit either the capital or wealth management business, due to reasons ranging from performance to compensation, says Andrew Marsh, CEO of Richardson GMP.

Read: Richardson GMP sets aggressive Toronto growth target

A GMP release noted the firm undertook additional cost-cutting measures, including “salary reductions and a rationalization of its real-estate footprint,” all of which is expected to generate annual savings in excess of $5 million.

“Every CEO is constantly looking for ways to maximize efficiencies,” says Marsh. “In addition to taking a hard look at our cost structure because of challenging [economic] conditions, there were some inefficiencies in the work flow for an employee who was [being paid by] GMP but doing most of [his] work for Richardson GMP.

“It behooves both Harris [Fricker, president and CEO, GMP Capital Inc.] and myself to challenge the way we do things to make sure there isn’t a better way,” adds Marsh. “It’s a recognition that at $15 billion [in AUM] and with strong cash flows, Richardson GMP has matured to the point that we can take on all these people.”

Read: Richardson GMP brings advisors on board

For RGMP, this means better control over the firm’s day-to-day destiny and a savings of $1.8 million, says Marsh.

“It’s a more intelligent way to run our business, but our relationship with GMP doesn’t change.” It continues to be RGMP’s carrying broker.

“The more value-add activities like mutual funds and registered products are wealth management services, not services that GMP’s institutional clients need.”

Read: Boutique vs. bank battle rages on

Currently, GMP owns about a third of RGMP, but the Globe and Mail reports that GMP hopes to eventually acquire all of the wealth manager.

Marsh denies the savings realized from the restructuring are being squirreled away to fulfill that objective.

“That’s operating savings,” he says. “What GMP is trying achieve is building as much torque in the its cost structure so when conditions start to improve, there’s significant financial and economic [leverage] in a leaner operating platform.”

Marsh conceded if GMP were to buy all of RGMP one day, “we’d continue to be working toward developing Canada’s strongest independent investment and wealth management firm.”