State Street is to lose 1000 jobs - primarily in the US - under plans to cut costs and consolidate operations in the wake of its acquisition of Deutsche Bank Global Securities Services.
State Street expects to generate $125-150 million in pre-tax cost savings in 2003 through the integration plan, which is expected to be substantially complete over the next 12-18 months. Restructuring costs in 2003 are expected to run to $90-$110 million on a pretax basis.
Most of the savings are expected to flow from the consolidation of operations in the US. State Street says it will close down former Deutsche Bank sites in Jersey City and Nashville in the third quarter of 2004. Client services and management will be moved to New York, where State Street plans to consolidate operations in new premises in lower Manhattan.
In Europe there is less overlap with the acquired businesses. Under the plan, Edinburgh will continue to be a major financial centre for State Street focused on fund administration, performance measurement and securities operations. State Street has also designated Edinburgh as the site of the company's European continuous back-up centre for securities operations. State Street's London operations will remain a primary investment management, investment servicing and securities lending centre. Existing operations in Germany and Ireland will also emerge from the integration largely unscathed.
In Asia Pacific, Singapore will become the site of a significant State Street operations centre, leaning heavily on Deutsche Bank's established presence in the region.