Northern Trust Corp. announced Monday that it will cut 450 positions, or about 4% of its workforce, to offset $300 million in third-quarter charges to support its money market funds. This will result in a pre-tax charge of $20 million to $25 million in the fourth quarter, or five cents to seven cents per share.
Going forward, Northern Trust estimates that the elimination of the positions will save it $50 million to $60 million a year, before taxes. The jobs will be cut in the first quarter, using attrition whenever possible.
The macroeconomic environment has been extraordinarily difficult and has impacted all segments of the global economy, said Northern Trust CEO Frederick H. Waddell. Our decisions, while difficult, will further enhance Northern Trusts position amid challenging conditions, while maintaining our focus on clients and those activities in which we have significant competitive advantage and continue to see opportunities for growth.
Northern Trust, which has sizable money market fund assets, took a hit in the third quarter when it had to provide additional capital support to a number of its money market funds to ensure that they did not break the buck. It also had to repay clients who lost money in a securities-lending program.