ZURICH (Reuters) - Swiss asset manager GAM Holding AG could cut more than 40% of its workforce as Chief Executive Peter Sanderson seeks to restore profitability at the group, Bloomberg reported on Monday citing an unidentified source.

GAM declined to comment on the report, which said the company could reduce employee numbers by between 250 and 350 under one scenario being discussed.

It employed 863 staff at mid-year, down from 935 full-time equivalents a year earlier as it slashed costs.

No final decision has been taken on potential cuts, which would focus on back-office staff and operations, and GAM could still pursue a different course, the news agency said, citing unnamed people familiar with the situation.

GAM shares fell 1.6% by 1608 GMT.

GAM in July called a truce with former star manager Tim Haywood after months of wrangling over his sacking, saying it was drawing a line under a saga that had hammered its share price.

GAM's stock lost three quarters of its value in 2018 after the dismissal of Haywood for alleged breaches of the company's rules prompted the closure of his funds and spurred clients to pull billions of Swiss francs from the company.

The pace of outflows slowed in the third quarter of this year, when assets under management decreased slightly to 135.7 billion Swiss francs ($136.08 billion)

($1 = 0.9972 Swiss francs)

(Reporting by Michael Shields; Editing by Christina Fincher)