State Street to cut as many as 1,800 jobs

State Street Corp. said it plans to cut 1,600 to 1,800 positions, about 6 percent of its workforce, through the first quarter of 2009 to reduce costs, the latest Boston financial firm to shed jobs in the wake of steep market declines.

State Street employed 28,900 people worldwide, as of October, with about 13,900 in Massachusetts.

The reductions will mainly occur among middle and senior managers, the company said in a statement, as opposed to eliminating customer service-related positions. About two-thirds of the eliminated jobs will be in North America, with the rest in Europe and Asia, the company said. It did not immediately provide more details about the cuts.

“It is important for State Street to continue to deliver consistent earnings growth, particularly during this difficult environment,” said State Street chief executive Ronald E. Logue in a statement. “Taking this action increases our ability to do so.”

Because their revenue and profits are tied to the assets they manage, financial firms have been hard-hit by the declines in the value of investments. Other Boston firms including Fidelity Investments and MFS Investment Management have also disclosed layoffs recently.

State Street said severance benefits and other costs will lead to pretax charges of between $325 million to $350 million, or between 51 to 55 cents per share. The action will save the company up to $400 million annually, it said.
(By Ross Kerber, Globe Staff)