Thread regarding State Street Corp. layoffs

State Street 3,400 job loss

State Street Corp. reduced its headcount by 3,400 employees last year as part of a cost savings initiative, more than doubling the number of job cuts it had anticipated at the outset of 2019.

The company (NYSE: STT) revealed the figure Friday morning alongside its fourth-quarter earnings. Its stock price was up by 5% in early trading to more than $85 per share, as the financial services giant reported a slight year-over-year increase in revenue and a jump in net income of over 60%.

A year ago, the firm had announced that it planned to cut approximately 1,500 employees. State Street has struggled to grow revenue as it faces intense pricing pressure in what has long been its core business, custody banking. The job cuts came at what State Street considers high-cost locations, including its Boston headquarters. The layoffs included a significant number of senior managers.

But as the year progressed, State Street raised the target as revenue continued to fall year-over-year. In July, it said it planned to cut 2,300 jobs at high-cost locations in 2019. By October, it had reduced headcount by more than 2,700 employees.

Ultimately, the figure ended up at 3,400 workers, or 8.5% of its global workforce at the start of 2019. The company did not break out where the job cuts occurred.

More layoffs appear to be in the offing. In a presentation to investors last month, State Street executives said they plan to “optimize” the company's information technology workforce further in 2020, including by increasing the percentage of IT jobs that are located offshore and reducing its footprint across four to five high-cost locations.

In all, the company aims to save $150 million to $200 million this year on IT costs. It realized $415 million in savings through last year’s cost-cutting initiative, which was broader.

Even with significantly lower expenses, State Street’s net income available to common shareholders dropped by more than 10% in 2019, to $2.15 billion.

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State Street has been investing in its workforce in select areas. It’s been building up its headcount in China, India and Poland for years, where workers are paid less. It’s also made hundreds of new hires at Charles River Development, the Burlington-based investment software provider it acquired in 2018 that is a key part of its growth strategy moving forward.

In a statement Friday, State Street Chairman and CEO Ron O’Hanley said he sees the company as making progress. He pinned some of its difficulties last year on market weakness.

“We acted aggressively to offset these headwinds, improve value to clients, stabilize revenues and reduce expenses,” he said. “While we have made measurable progress towards our revenue and cost savings targets, we have more to do to improve margins and reach our medium-term goals by optimizing our technology infrastructure and client-centered revenue growth as key drivers. We are confident in the trajectory of our business and focused on continuing to improve our performance."

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Post ID: @OP+133ofC6z

5 replies (most recent on top)

@Post ID: @133ofC6z-3dnp

And too many departments are left with so called Senior people (lol) who been there 5 years our less struggling with many issues they have no idea to solve.
Because all the Old timers with 20++++++++ years of experience were dumped

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Post ID: @3qtj+133ofC6z

I was 53 when they cut me. I had always had very good Ratings on my PPRs and yet they pick because to lay off because I was "expensive" . The department has struggled since than. Not to say I could not be replaced but experience, customer knowledge and a little grey hair go a long way.

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Post ID: @3dnp+133ofC6z

One big mistake the company made, was they laid off so many old people 50++ they last a vast
knowledge base of talent.

Now you are left with no offense people with less than 5 years of experience in many departments.
And when a problem pops up many are not able to solve the problem because it was the old timers
who updated the Knowledge base which had answers.

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Post ID: @3sdy+133ofC6z

Now they are going at people age 50 and up

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Post ID: @2wmf+133ofC6z

Although a breakdown of that 3,400 employee reduction number doesn’t seem to be available, I’m guessing 1/3 were employees leaving for another job. We had 7 leave and 2 get terminated in my group of 30. If another person gets terminated I know of at least 3 more that will leave due to the additional work that will get heaped on them. I’m not happy about that, just sharing one story that seems to be the norm across the company. The sad part, they do target the over 60 people first. Then the over 55. It’s about $, the salaries and health benefits.

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Post ID: @1uyw+133ofC6z

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