ING Americas will be saving $250-300 million through cost-cutting measures, including an estimated 1,600-person staffing cut across all its lines of business, including mutual funds.
"We are looking at a 15% reduction pretty well across ING Americass US operations, so that includes the former Aetna and ReliaStar businesses (now US Financial Services), mutual funds, reinsurance, and the region corporate functions. ING Barings and ING Direct are not part of that group," explained Dianne Bernez, spokesperson for ING.
The decision to cut staff arose both from the consolidation of ING acquisitions Aetna and ReliaStar, as well as economic pressures from the slowed market.
"The move that were doing is very central to our brand strategy, to be a much more customer-focused organization. Theres no doubt that the weakening economy has certainly forced us to put a closer scrutiny on positions," said Bernez. "We dont anticipate that were going to be making any more cuts."
In addition to the job eliminations, ING has reduced travel expenses, consulting fees, streamlined procurement, and physical plant consolidations.
Although job cuts will begin immediately, ING has only now initiated the process of assessing which roles will not be necessary. Bernez said that all employees will know of their fate by the middle of the first quarter of 2002, which might seem like a long wait to outsiders.
"We actually believe we are moving quickly to notify employees. This is hard news to deliver. ING has a very strong employee culture and is moving as quickly as possible to minimize anxiety," argued Bernez.
As part of the transition, the fund unit will now be grouped into US Financial Services with Aetna and ReliaStar under the leadership of CEO Tom McInerney, following the retirement of John Turner. Turner, former CEO of ReliaStar, had offered to stay on board until the transition was well under way. According to Bernez, his deal with ING guaranteed that he would be able to retire by September 2002, but that he would step down as soon as possible.
Was Turners retirement, announced earlier this week, related to the job cuts?
"It was related to the extent that John felt that the new leadership was in place and he felt that it was an opportune time to back away as the new leadership gets formed," said ING spokesperson Dana Ripley.