BNY Mellon will lay off 1,500 staff and implement a hiring freeze as part of an expense reduction plan in response to rising expenses.
The layoffs represent about 3% of BNY Mellons workforce of 48,900 staff.
“Over recent quarters, BNY Mellon has succeeded in building positive revenue momentum, says Robert P. Kelly, chairman and CEO of BNY Mellon. However, expenses have been growing unsustainably faster. We expect our natural turnover and immediate hiring freeze will reduce the impact on existing staff.
BNY Mellon said in a statement it will [take] advantage of natural turnover, implement a hiring freeze across most of the company and reduce the use of temporary workers, consultants and contractors. The plan also involves operational and technology efficiency efforts.
Kelly hinted at the expense reduction plan in BNY Mellons second quarter earnings report, saying that although profits were up 15% in Q2 2011 compared to the same quarter in 2010, expenses particularly legal and regulatory costs were growing as well.
A BNY Mellon spokesperson told Global Custodian last month the firm is reviewing system procurement processes and office locations as well, although it had not yet solidified its cost-reduction plans at the time. It is not known if BNY Mellon is still considering reducing the scale of or closing office locations.
State Street and Northern Trust have also laid off workers this year, and HSBC announced in early August it was laying off 30,000 workers.
(CG)