Indian information technology (IT) major Wipro and IBM have bagged additional work from US-based financial services giant State Street Corporation.
As part of its cost cutting initiative, State Street will transfer 320 IT employees to IBM or Wipro, said a company release. The company will eliminate another 530 positions over the next 18 to 20 months in North America.
The immediate financial impact of the deal with Wipro and IBM could, however, not been ascertained. For Wipro, State Street is among the top 15 clients. When contacted, Wipro refused to comment, as the company is in the “silent period”. It will announces its first quarter FY12 results tomorrow. This is part of the multi-year business operations and IT transformation programme – the job cuts is part of an “IT transformation”– announced by the company in November 2010.
State Street expects to achieve an annual pre-tax run-rate expense savings from its business transformation initiatives of between $575 million and $625 million by the end of 2014. It expects to recognise restructuring cost of approximately $400 million to $450 million over the four years.
“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,” said James S. Phalen, executive VP and head of global operations, technology, State Street.
The programme is expected to enhance the company’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.
With $22.762 trillion in assets under custody and administration and $2.116 trillion in assets under management as of June 30, 2011, State Street operates in 26 countries and more than 100 geographic markets and employs 29,450 worldwide.
