State Street says it's laying off 1,500 workers to cut costs
State Street Corp. said it’s laying off 1,500 staff as part of a plan to reduce costs.
The layoffs equate to about 6% of the workforce in high-cost locations, the Boston-based bank said in an earnings statement Friday. Senior management is being reduced by 15%.
Ronald O’Hanley, who took over this month as chief executive officer of the money-management and custody-banking giant, is pushing to reduce expenses, automate more functions and simplify the organizational structure. Bloomberg reported last week that State Street began cutting 15% from its ranks of hundreds of senior managers, including executive vice presidents and senior VPs.
The new CEO has said the firm needs to reduce structural costs by 2% to 3% a year.
Investors responded warmly to news of the job cuts: State Street’s stock has rallied 13% this year, making it the second-best performer among 18 companies in S&P’s index of money managers and custody banks. The shares sank 35% in 2018 as rocky markets crimped third-quarter fee revenue and analysts questioned whether the purchase of a software maker was too costly.