AFG budgets for one quarter less business

Succumbing to poor market conditions, Australia's largest broker has retrenched almost a fifth of its workforce in an effort to cut costs.

Kevin Matthews, executive director national operations at AFG, said the broker had more people than needed to handle current volumes of around two and a quarter billion in loans per month, with employee numbers geared to handle volumes of three billion per month.

"Out of the 37 people, only four of them were business development type staff.

"Prior to that, we would have had around 30 in the sales force, so the impact on the sales force is nowhere near as great as it has been with our back office."

AFG says service levels to brokers will not be affected, with sufficient staff retained to handle the lower monthly volumes. The reduction in broker commissions will also hurt AFG profitability.

Total AFG lending for the six months to April 2008 was $13.6 billion, which is comparable to the same six-month period a year before, but reduced considerably from the $16.8 billion turnover for the preceding six months.