During an analyst conference Wednesday, Mellon CEO Martin McGuinn said that the company is “reviewing our options” regarding Mellon’s Human Resources & Investor Solutions (HR&IS) unit, according to the Pittsburgh Tribune-Review.
The Ridgefield, New Jersey-based Mellon HR&IS accounts for 30% of the company’s workforce and 20% of its revenue. Last year, revenues for the unit were down 2.8% to $918 million, with its fourth quarter revenue of $231 million nearly the same as the same quarter in 2003. According to Vice Chairman Steven Eliot, the revenues from the consulting side of the business – which makes up 40% of the unit’s intake – yielded “most revenue disappointment,” according to the paper.
Mellon became a force in the HR industry in 1997 with the purchase of Buck Consultants, according to the paper. Currently, the unit operates 40 offices and employs 5,700 employees nationwide.
McGuinn stated that although the HR business continues to be attractive, threats posed by competitors, such as the newly formed alliance between Towers Perrin and EDS, make it harder for the unit to stay competitive (See Towers Perrin and EDS Create HR Outsourcing Firm ). “Those factors are very real and continue to have an influence” on the business, McGuinn told analysts, according to the paper.
Mergers and acquisitions in the HR area have been increasingly common as of late, with the Towers Perrin/EDS deal following a similar pact between HR giants Hewitt and Exult in June (See Hewitt Absorbs Exult ).
Mellon officials would not comment on further restructuring, staffing and disposing details regarding the business, saying it would be “inappropriate to speculate”.
For more information about Mellon’s HR&IS unit, see http://www.mellon.com/corporateinstitutionalservices/humanresourcesservices.html .
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