PARIS (dpa-AFX) - State Street Corp. (STT) said that the new cost-cutting program will reduce its workforce by 6%, or about 1,500 employees and will cut number of senior managers by 15%.
Ronald O'Hanley, President and Chief Executive Officer, said ',... Amidst challenging market and industry headwinds, we have launched a new expense program designed to reduce costs. As part of that program, we recorded a $223 million pre-tax repositioning charge, the benefits of which we expect to fully realize within 12-15 months.'
State Street said it expects to realize $350 million in underlying expense savings in 2019, through increased resource discipline, process re-engineering and automation. As part of the expense program's initiation, the fourth-quarter of 2018 expenses included a repositioning charge of $223 million, including $198 million of compensation and employee benefits and $25 million of occupancy costs.
The expense program includes reduction of senior managers by 15% through management delayering and aligning global organizations; introduction of a more rigorous performance management system; increased vendor management in subcustody and professional services.
The company announced workforce reduction of 6%, or approximately 1,500 employees, in high cost locations as the Company realizes benefits of automation and standardized global processes; ationalization and streamlining of 3 operational hubs and 2 joint ventures; retirement of legacy applications and accelerated move to common platforms; limiting regional and client operating differences and reducing the number of manual, bespoke activities.
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