Crunch time

18 January 2019 By Tom Buerkle

State Street will slash its payroll by 6 percent. Both the selloff in stocks and outflows hit the company’s AUM in the fourth quarter. The investment industry is already reeling from fee pressure and turning to technology as the solution. That will mean plenty more pink slips.

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State Street on Jan. 18 said it would reduce its workforce by 6 percent, or about 1,500 employees, to lower expenses. The initiative includes cuts of 15 percent in the number of senior managers. The company said it expects to save $350 million in expenses in 2019 as a result.

The company also reported that net income available to common shareholders was $398 million or $1.04 a share in the fourth quarter of 2018, up from $334 million or 89 cents a share in the same period a year earlier. Excluding a $223 million charge for the job cutbacks and other one-offs, earnings were $1.68 a share, just ahead of the mean estimate of analysts polled by Refinitiv’s I/B/E/S. Revenue totaled $3 billion in the quarter, up 4.9 percent from a year earlier.

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