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|State Street Provides Mid-Year Update on Business Operations and IT Transformation Program|
Announces Expanded Service Relationships with IBM and Wipro Technologies to Further Accelerate New Technology Development
BOSTON, Jul 19, 2011 (BUSINESS WIRE) -- State Street Corporation (NYSE: STT), one of the world's leading providers of financial services to institutional investors, today provided an update of its multi-year business operations and IT transformation program. First announced in November 2010, the program is designed to enhance State Street's growth by substantially increasing its focus on technology research and development and service excellence to drive innovation for clients and to streamline its operating model.
In step with the program, which is expected to be completed in 2014, the company will expand its longstanding relationships with IBM and Wipro Technologies (Wipro) to support components of its technology infrastructure and application maintenance and support systems. IBM is a global leader in business and technology services with expertise in the financial services industry, and Wipro is a leading global information technology and consulting company that specializes in IT solutions and services. By expanding its relationships with two established industry leaders that specialize in IT support services, State Street can increase the efficiency and effectiveness of its overall IT operation. State Street's internal IT resources will be more focused on research and development, including further use of innovations such as private-cloud computing that will create more sophisticated, client-facing solutions and services.
As part of this program, approximately 320 non-client facing State Street IT employees will transition to IBM or Wipro and another approximately 530 non-client facing IT employees will be provided with severance and outplacement services as their roles are eliminated over the course of the next 18-20 months. Nearly all of the impacted employees are located in North America. State Street currently employs approximately 4,000 IT employees worldwide.
"Our business operations and IT transformation program reflects our commitment to maintaining an advantage that supports our continued growth in an increasingly competitive global environment," said James S. Phalen, executive vice president and head of Global Operations, Technology and Product Development. "While making changes that impact a number of our employees is never easy, we believe that this move is a necessary step that will allow us to better deploy our resources in line with our core competencies, efficiently leverage the capabilities of our partners, and enable us to offer more sophisticated products and services to our clients."
As announced on November 30, 2010, State Street expects to achieve annual pre-tax run-rate expense savings from its business transformation initiatives of between $575 million and $625 million by the end of 2014 and to record pre-tax restructuring charges of between $400 million to $450 million in total over the four-year period. The Company expects to record approximately $110 million to $130 million of those pre-tax restructuring charges in the second half of 2011 to accrue for the severance and related costs associated with workforce reduction and other transition costs as a result of the company's expanded technology relationships described above.
State Street Corporation (NYSE: STT) is the world's leading provider of financial services to institutional investors including investment servicing, investment management and investment research and trading. With $22.762 trillion in assets under custody and administration and $2.116 trillion* in assets under management at June 30, 2011, State Street operates in 26 countries and more than 100 geographic markets and employs 29,450 worldwide. For more information, visit State Street's web site at http://www.statestreet.com or call +1 877/639-7788 [NEWS STT] toll-free in the United States and Canada, or +1 678/999-4577 outside those countries.
*This AUM includes the assets of the SPDR Gold Trust (approx. $58 billion as of June 30, 2011), for which State Street Global Markets, LLC, an affiliate of State Street Global Advisors, serves as the marketing agent.
This news release contains forward-looking statements as defined by United States securities laws, including statements relating to our goals and expectations regarding our multi-year business transformation program and the financial, operational, technological, customer and other business effects and strategies of that program. Forward-looking statements are often identified by such forward-looking terminology as "plan," "expect," "look," "believe," "anticipate," "estimate," "seek," "may," "will," "trend," "target," and "goal," or similar statements or variations of such terms. These statements are not guarantees of future performance, are inherently uncertain, are based on current assumptions that are difficult to predict and involve a number of risks and uncertainties. Therefore, actual outcomes and results may differ materially from what is expressed in those statements, and those statements should not be relied upon as representing our expectations or beliefs as of any date subsequent to July 19, 2011.
Important factors that may affect future results and outcomes include, but are not limited to:
Other important factors that could cause actual results to differ materially from those indicated by any forward-looking statements are set forth in our 2010 Annual Report on Form 10-K and our subsequent SEC filings. We encourage investors to read these filings, particularly the sections on risk factors, for additional information with respect to any forward-looking statements and prior to making any investment decision. The forward-looking statements contained in this presentation speak only as of the date hereof, July 19, 2011, and we do not undertake efforts to revise those forward-looking statements to reflect events after that date.
SOURCE: State Street Corporation
State Street Corporation