State Street Corp., the world's largest money manager for institutions, plans to cut 1,700 jobs by March to offset the impact of the bear market on profits.
State Street will shed about 6% of its 28,700 employees, about two-thirds of that coming in North America, the Boston-based company said today in a statement. The reductions will mostly come in middle and senior management ranks.
Fund managers and custody banks have suffered as $31 trillion in value has been erased from world equity markets in 2008, a loss of 51%. Bank of New York Mellon Corp., the world's largest custodian of investment assets, said Nov. 20 it will eliminate 1,800 jobs, or 4% of staff.
State Street had $14.1 trillion in assets under custody as of Sept. 30, down 6.9% this year. Assets under management fell 15% to $1.69 trillion.
The company said in October it may set aside as much as $450 million before taxes this quarter to absorb losses for investors whose funds were hurt when credit markets seized up.
The company also reported third-quarter earnings rose 33% as volatile financial markets increased securities-lending and trading fees.