State Street, the third- largest custody bank, said it will eliminate 630 jobs in its third round of cuts in two years to bolster profit as record low interest rates weigh on revenue from lending.
Bloomberg reports that Friday’s announcement, equal to about 2% of the company’s workforce, brings job cuts since November 2010 to almost 2,900, as Chief Executive Officer Joseph Hooley seeks to offset the impact of lower income from lending and muted trading activity among clients.
State Street has struggled to raise operating profit over the past four years as the U.S. Federal Reserve held its benchmark interest rate at zero to 0.25 percent since December 2008 in an attempt to stimulate borrowing and economic growth. Low rates hurt custody banks by reducing the return they make on their own investments and lending. They’ve also forced State Street to waive some fees on money-market funds to keep client returns above zero.
Hit the link below to access the complete Bloomberg article: