Putnam Investments parent Marsh & McLennan on Friday announced plans to chop 750 employees from its payroll and undertake several other cost-cutting initiatives, including consolidating locations and retooling its information technology teams.
By the end of 2008, Marsh & McLennan hopes to save $350 million, the company said in a statement.
"Over the past two years, this management team has successfully achieved $800 million in restructuring savings on time, as promised," said Michael G. Cherkasky, chief executive and president. "These past successes are evidence that the savings announced today can be delivered," he said.
The second-biggest insurance brokerage in the world, New York-based Marsh & McLennan is parent to insurers Marsh, Putnam, human resource consulting firm Mercer, Guy Carpenter reinsurance and Kroll risk assessment, and through its subsidiaries, employs 55,000 people in 100 countries.
Annual revenues are approximately $12 billion, the company said.
In recent years, the company has suffered regulatory setbacks. Putnam specifically was central to mutual fund market-timing scandal, and this month settled once again with the Securities and Exchange Commission, this time for allegations of miscalculating performance fees in one of its 109 funds. One of five firms involved in the regulatory sweep, the company agreed to pay $1.65 million in restitution and interest.
The restructuring plan calls for most jobs to be cut through attrition, according to the company statement, streamlining its information technology departments, examining its procurement process and perhaps consolidating offices.
The Marsh and Mercer units of the company will be most affected, according to the release.
Restructuring will cause Marsh & McLennan to take $225 million in charges, and will be executed over three years with 15% of the plan implemented this year, 55% in 2007 and 30% in 2008.