State Street Financial Center (Photo: Bloomberg)

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.

As of the end of the third quarter, the firm had $36.6 trillion in assets under custody and/or administration, $3.1 trillion in assets under management and 39,000 employees worldwide servicing more than 100 geographic markets.

In addition to State Street, Bank of America has also kept to its pledge to not lay off employees in 2020. Goldman Sachs, Wells Fargo and Citigroup have resumed layoffs, which they halted earlier this year due to the pandemic.

When asked Thursday for more details on the types of layoffs planned for 2021, a company spokesman said in statement that “as a result of operating model changes, business process changes and automation, we are planning for elimination of some select roles.”

In addition, the spokesperson explained, the firm “also anticipate[s] adding many new roles across the organization in support of our strategic growth goals, and will continue to focus on redeploying our current employees into those new roles.

— Check out Wall Street Eyes More Job Cuts After Headcount Swells in 2020 on ThinkAdvisor.