State Street announced today that it is taking steps to trim its operating expenses by approximately $125 million for the remainder of 2003, compared to its first quarter run rate.
These reductions are in addition to those stemming from the Deutsche GSS acquisition, and will be introduced from the second quarter. Up to 1,800 people, in addition to the reduction of 1,000 people previously announced in connection with the GSS acquisition, are expected to lose their jobs – though the bank hopes top achieve the majority of the reductions through natural wastage. The company’s workforce has more than doubled during the past ten years and today stands at over 22,000 worldwide, including the 3,000 people inherited from Deutsche GSS.
“We are positioning State Street for improved profitability,” says David A. Spina, chairman and CEO of State Street Corporation. “Keeping our company financially strong – and building on our leadership position in global financial markets – will enable us to take advantage of the many opportunities we see in the market today. Our top priorities are to continue to help our clients find ways to succeed in meeting their investment and business goals and to serve the best interests of our stockholders and employees. We are continuing to invest in strategic initiatives that are important to our future growth.”
The company expects the redundancy and severance costs to result in a pre-tax charge of $125-75 million.