State Street is scaling back its workforce and upping its automation, the company announced during its fourth-quarter earnings Friday.
Custody banking giant State Street is scaling back its workforce and upping its reliance on technology.
The Boston-based firm will reduce its employee count by 1,500 jobs in high-cost locations, State Street said in an earnings release Friday. The layoffs amount to roughly 6 percent of its total workforce, including a 15 percent reduction of senior management.
The move will help cut costs and make room for "benefits of automation and standardized global processes," State Street said.
"While we have made progress on our technology transformation, much remains to be done and we are not satisfied with our recent performance," CEO Ronald O'Hanley said in the fourth-quarter earnings release." Structural costs are still too high and our automation efforts have not moved fast enough."
State Street is responsible for custody, or storing securities on behalf of the client, for more than 10 percent of the world's assets, according to the company. It is one of the top firms for the vital but not-so-glamorous job of holding mutual funds and other assets for clients like Fidelity. State Street is also one of the top five ETF providers along with names like Invesco and Schwab.
The firm beat Wall Street's expectations for the fourth quarter, bringing in $1.68 adjusted earnings per share vs. $1.67 expected by analysts. Its fourth quarter revenue was $2.99 billion vs. the $2.98 billion expected.
Shares State Street rallied 2.75 percent in pre-market trading after the announcement Friday. The stock is up 15 percent since the beginning of January. Over one year though, State Street's stock has dropped about 30 percent.
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