Northern Trust Corp. announced today it will eliminate 450 jobs in 2009.
The Chicago-based company, which operates an office in Milwaukee, said it expects to record a pre-tax charge in the fourth quarter of 2008 of approximately $20 million to $25 million (5 to 7 cents per share) associated with severance and benefits relating to the elimination of the jobs and other costs.
The actions are expected to generate approximately $50 million to $60 million in annualized pre-tax savings, the company said.
Northern Trust said the layoffs are needed to improve its profitability under "difficult economic conditions. The layoffs will begin after the first of the year, and the company said it will use attrition whenever possible.
"The macroeconomic environment has been extraordinarily difficult and has impacted all segments of the global economy. Our decisions, while difficult, will further enhance Northern Trust's position amid challenging conditions, while maintaining our focus on clients and those activities in which we have significant competitive advantage and continue to see opportunities for growth," said Frederick Waddell, chief executive officer of Northern Trust.
The company did not specify where the job cuts will happen.
Today's announcement came weeks after Northern Trust disclosed that the U.S. Treasury will spend up to $1.5 billion to buy senior preferred and related warrants from the company under the federal Troubled Asset Relief Program (TARP) as part of the $700 billion federal bailout plan.
Layoffs are mounting in the distressed banking industry. Citigroup Inc., the parent company of CitiBank, recently announced it will eliminate 52,000 jobs. Bank of America Corp. plans to lay off 35,000 after acquiring Merrill Lynch.
Northern Trust to cut 450 jobs
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