Bloomberg News

State Street to Cut 850 More Jobs After Expenses Climb 20%

July 19, 2011

July 19 (Bloomberg) -- State Street Corp., the third- largest custody bank, said it will cut 850 jobs within the next 20 months in addition to the 1,400 job cuts it announced in November.

About 530 information technology positions will be eliminated and 320 employees will transfer to jobs at outside IT vendors, the Boston-based company said today in a statement. All of the affected positions are located in North America, the company said.

State Street earlier today reported net income on an operating basis climbed 5.2 percent in the second quarter to $483 million, as rising markets and acquisitions increased the assets it oversees for clients. Expenses in the three months ended June 30 increased 20 percent compared with a year earlier, driven by a 22 percent rise in salaries and employee benefits.

“Expenses were a little higher than our expectations,” Tom Lewandowski, an analyst at Edward Jones & Co. in St. Louis, said in a telephone interview.

The company said Nov. 30 it would reduce its workforce by about 1,400, or 5 percent, by the end of this year as part of an effort to save as much as $625 million a year by the end of 2014.

--Editors: Steven Crabill, Christian Baumgaertel

To contact the reporter on this story: Christopher Condon in Boston at ccondon4@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net


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