State Street Corp. believes that it will have to shrink its workforce by up to 7,000 workers by 2020, through layoffs, turnover and moving employees to new ventures as it tries to reshape itself into a more technology-driven company.
The Boston-based financial firm has in recent months announced smaller layoffs, but had avoided saying how many total employees it planned to lose over the longer term until an investor conference in late February. The transcript of that conference was recently made available and the larger job reductions were first reported by the Boston Business Journal.
“We believe that we will reduce our staff across the globe 6,000 to 7,000 people over the five-year process due to this technology,” Michael Rogers, State Street chief operating officer, said at the conference on February 24. “Now most of these people will be redeployed into new business or are not replaced due to turnover, but that’s a big savings for us across the world.
State Street has 32,000 employees worldwide.
Company officials said the cuts would be across all departments, but would not comment further on the projections.
“We will continue to evaluate the needs of the organization to advance our long-term strategic priorities and continually look for ways to better align the organization,” spokeswoman Anne McNally said in a statement. “But we will also continue to hire in key areas of the business that are growing, such as data and analytics, or in areas where we need to add expertise.”
Despite layoffs in recent years, the company headcount overall has grown by 2,500 employees, McNally said.
State Street, which manages money and also handles administrative services for mutual funds, pensions, and other large investors announced in mid-March that it was going to layoff 252 people in Boston and Quincy, mostly senior executives. In October it laid off 600 people company-wide.
State Street is trying to further digitize its business, so more functions are handled with technology. The company is also under pressure from Wall Street investors to slash expenses as low interest rates have eaten into its profits. The company provides accounting and other back office services to financial firms, and also runs a large investment management business. In 2015 it reported revenues of $10.4 billion
Company executives said at the February conference that State Street expects to shave $550 million in expenses through 2020