Northern Trust Slashing 1,400 Jobs

June 23, 2003 ( - The stubborn and unforgiving economic downturn continued to exact its economic pound of flesh on financial services firms with word that Northern Trust Corp. is cutting 15% of its workforce.

The Chicago-based Northern Trust announced Monday that it expects to take a second-quarter pretax charge of $51.5 million for nearly 1,400 job cuts, about half made this month, and other transactions. The charge will reduce reported profit by $0.14 per share, the company said. Executives said in a statement that they hope the moves will eventually reduce operating expenses by about $145 million to $150 million a year.

As have its financial-services counterparts, Northern Trust, which provides private banking, global custody services and asset management, has struggled with a business slowdown triggered by tough market conditions. “We are taking these steps to allow us to improve profitability and focus our resources where we have clear competitive advantages and can serve our clients best,” said Chairman and Chief Executive William Osborn, in the statement.

The 114-year-old company said about $23.5 million of the charge related to the elimination of about 700 jobs, the majority of which took place in June.   It also said it will cut about 690 jobs by selling assets of Northern Trust Retirement Consulting LLC and other previously announced actions (See  Hewitt Picks Up NTRC  ).   Northern Trust said it expects total staff to fall below 8,000, from 9,336 as of March 31.

According to the company, the charge also includes:

  • a reduction in the amount of office space leased and owned as a result of lower staff levels ($16.1 million)
  • standardization of software applications across business units and replacement of existing software with more cost-effective alternatives ($9.5 million).

The strategic planning process that led to these actions also identified more cost savings, which Northern Trust expects to achieve over the next year, the announcement indicated.