State Street (STT) Announces Realignment Aimed at Reducing Costs; to Cut 1,600-1,800 Positions; Sees Pre-Tax Charge of $0.51-$0.55

December 3, 2008 4:52 PM EST

State Street Corporation, (NYSE: STT) announced today a plan 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, the company is initiating a reduction in force of approximately 6 percent of its global workforce. The reductions of approximately 1,600-1,800 positions will occur principally between now and the end of Q109. In order to maintain customer service, the reductions will largely be achieved by consolidating middle and senior management ranks. In line with State Street's global growth, approximately two-thirds of the reductions will occur within North America with the remainder in Europe and the Asia-Pacific region.

In connection with severance, benefits and other costs, the company expects to record total pre-tax charges of approximately $325-$350 million or $0.51-$0.55 per share. The action is expected to generate approximately $375-$400 million in annualized savings. For 2008, the company continues to expect growth in operating EPS to be approaching the high end of its established range of 10-15%; growth in operating revenue to be above the high end of its 14-17% range, and operating return on equity to approach the high end of its 14-17% range. Operating basis results for 2008 exclude the effects of the above referenced charge and other non-operating costs referenced in the company's SEC filings. State Street continues to expect growth in operating EPS for 2009 to be approaching the low end of its 10-15% range.

State Street Corporation, through its subsidiaries, provides a range of products and services for the institutional investors worldwide.

Related Categories

Corporate News
Guidance

Stocks Mentioned

Add Your Comment

Name

Subject

Body

Verification can't see the text?
click here to refresh the image.
what's this?