No, just playing. Not only are those lucky enough to be keeping their jobs receiving but a nickel in their stockings this Christmas, they also have a freeze on promotions to look forward to in ’09.
To: All State Street Employees
From: Ron Logue
Today we are announcing an important step we’re taking to support our continued growth and to align our resources to meet the challenges and opportunities of this difficult market environment. I want to provide you with some more background on this action, which includes a reduction in force.
As you know, over the past two years, and particularly during the first nine months of 2008, we have achieved strong growth in operating revenues and operating earnings per share. This result has set us apart from our competitors and has been particularly noteworthy in the second half of the year given the significant headwinds we have faced from market conditions. But we cannot be complacent, particularly in the face of this unprecedented market environment. We need to be proactive about protecting and building our franchise. Although our strategy and focus remain unchanged, we must calibrate our organization to the realities of the current environment.
In addition to extending the hiring slowdown that we have had in place in some business areas, continuing to reduce our professional fees, technology spend, real estate and travel costs, we are also implementing a reduction in force amounting to approximately 6 percent of our global workforce, or 1,600 to 1,800 positions. We have already begun this process and expect it to be completed by the end of the first quarter of 2009. As I have said to you in previous Town Hall meetings, our goal with any reduction in force is to limit the impact as much as possible by targeting span of control and overlapping functions. With this goal in mind, the majority of reductions are occurring within senior and middle management and staff areas where we can consolidate positions and gain more efficiency without compromising our customer service and support.
To further limit the scale of these reductions, we will not provide promotion or merit salary increases across the company in 2009.
We are committed to supporting the employees who leave State Street as a result of this reduction in force including providing severance and career transition services. We expect to record total pre-tax charges associated with these costs of approximately $325 million to $350 million or $0.51 to $0.55 per share.
While 2009 will undoubtedly be a challenging year, I believe the action we are announcing today will ensure that State Street is both well positioned within the new landscape in which we are now operating and in a stronger position to take advantage of opportunities when market conditions improve. Why do I believe this? We have proven in other times of turmoil and uncertainty our ability to stay the course and continue to grow. Key to this ability is that we make choices that benefit the greater good of the organization. Today’s announcement reflects one such choice.
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Structured finance ED bonuses down 55% from ’07 goose-egg levels.
Rumor has it a bomb drops at BofA on Monday. Cutting 25% of IB. Limited bonuses – cash up to $100k and any cash bonus beyond that is paid in 16 months (if you’re still there).
does the merit based salary increase freeze apply to rogue-logue as well? funny no mention of his comp …
does the merit based salary increase freeze apply to rogue-logue as well? funny no mention of his comp …
but what about the 2nd year associate numbers?
2nd year assoociates get a holiday party
2nd yr associates get holiday party
Using midpoints, STT is taking a $337.5M charge for 1,700 layoffs? Does it really cost ~200K to fire someone? That can’t all be severance (though if it is, they can sever me). Makes me wonder what exactly “career transition services” includes.
@10, hookers and blow, obviously
RE comment #5 and 6: Um, isn’t his salary, bonus, exercised options etc. a mater of public record? and why would you think that “across the company” does not mean across the company?
Ron Logue. Sounds like a filthy foreigner. Damn those lousy foreigners! What happened to executives with last names like Smith, Jones, Hamilton and Asshat?
Kind regards,
Joe 12-Pack
@11, good. I have some friends at SST, hopefully they will share.
10
@12: my point is that when all other execs are forgoing bonuses in the face of layoffs and bailouts, logue was pretty quick to screw his entire company for ALL of 2009 with no mention of any personal sacrifices to be made by he and his executive cohorts.
yes, his comp is public record – but not until he actually recognizes it you fucking dilweed. get bent.
@15 that was exactly what my colleagues and i were thinking when we saw the email: no mention of senior exec sacrifice. Also, is there a precedent with other banks announcing no raise/promos for 2009? That’s totally bullshit
If comp down 50% and no one is left standing, is comp really down?
no one would cry for the miserable bonus that will not be this year.
@12/@15- @15 is correct- we won’t know rogue’s comp until much later. it’s even worse than that when you consider agency problem – he is doing what is best for his future earnings, ie. firing 1,800 employees during the holidays and spending $350mm of shareholder money in order to boost future earnings to which his future comp is most directly tied. he is not doing what is best for all stakeholders. it’s the biggest joke of all in these layoffs – blame it on the need to “right-size,” when truth is he’s just a greedy b*stard.