State Street to axe 600 jobs to reduce costs

money cuts

'Accelerating the next phase of our transformation program to create cost efficiencies'.

State Street, the world’s second-largest custody bank, said it’s firing 600 employees globally to accelerate cost reductions after the stock market slump will probably make its goal for fee revenue growth unattainable this year. 

Bloomberg News reports that the bank took a $75m pretax charge in the third quarter in connection with the layoffs, which will result in a headcount reduction of 200 on a net basis.

State Street said it may not reach a target to increase fee revenue by 4% to 7% on an operating basis this year, after a slump in global stock markets, particularly emerging markets, eroded assets.

'In light of the continued challenging environment we are accelerating the next phase of our transformation program to create cost efficiencies', CEO Joseph Hooley said in a statement Friday in Boston. “We’re balancing investing in our business with managing against macroeconomic challenges and elevated regulatory costs.”

State Street, which has 30,000 employees worldwide, is accelerating cost cuts after an almost 10% decline in global stock markets last quarter hurt assets and fees for overseeing them, compounding the impact of low interest rate that have plagued custody banks since the financial crisis. 

To access the complete Bloomberg News article hit the link below:

State Street Cuts Jobs, Outlook as Market Drop Hurts Fees

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