State Street, the giant mutual fund custodian, will take a $196 million restructuring charge in the second quarter to cover the voluntary buyout of 3,100 of its employees, Reuters reports.

In April, as the firm announced a 46% reduction in earnings in the first quarter, State Street said it would eliminate 1,800 jobs to cut operating expenses by $125 million through the remainder of 2003. Because 1,300 more people accepted its buyout plan than the firm expected, State Street said that in the next 12 months, it will hire between 800 and 1,000 new employees.

"We acted decisively to position State Street for improved profitability," David Spina, State Street chairman and chief executive officer, said in a statement.

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