State Street is among just a few financial services firms that pledged no layoffs during the pandemic and stuck with it, but that is about to change.
At this week’s Goldman Sachs U.S. Financial Services conference, Ron O’Hanley, State Street CEO, said the firm’s pledge to “not displace anybody” this year “will go away.”
The executive explained that State Street has been routinely substituting labor, as part of a broader strategy to reduce expenses, which fell 2% in 2019 and 2% through the third quarter of this year. Total revenues have increased 1% through the third quarter compared with a 4% decline for for the same period a year ago.
“This is really about focusing on productivity and automation … we are still in early innings on this in driving productivity and productivity management in the organization,” said O’Hanley, whose remarks were first reported by FundFire. O’Hanley added that the firm has started to realize some of the benefits of automation but more is yet to come.
State Street is in the process of finalizing its budget, which it will share in January, said CFO Eric Aboaf who was also at the Goldman Sachs conference.