The Boston-based financial services giant described the plan as one designed to ” reduce its operating costs and support the company’s long-term growth while aligning the organization to meet the challenges and opportunities presented by the current market environment.”
To reduce its operating cost base, State Street said that the reductions of approximately 1,600 to 1,800 positions will occur “principally between now and the end of the first quarter of 2009.” Additionally, “in order to maintain customer service,” State Street said that those reductions “will largely be achieved by consolidating middle and senior management ranks.” Approximately two-thirds of the reductions will occur within North America with the remainder in Europe and the Asia-Pacific region.
“It is important for State Street to continue to deliver consistent earnings growth, particularly during this difficult environment,” said Ronald E. Logue, chairman and CEO of State Street. “Taking this action increases our ability to do so.”
State Street said that in connection with severance, benefits and other costs, the company expects to record total pre-tax charges of approximately $325 million to $350 million or $0.51 to $0.55 per share. The action is expected to generate approximately $375 million to $400 million in annualized savings. The firm said that it continues to expect growth in operating earnings per share for 2009 to be approaching the low end of its 10 to 15 percent range.
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