Putnam Parent to Slash 750 Jobs to Save $350M
September 25, 2006
Putnam Investments parent Marsh & McLennan plans to slash 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.
"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."
The second-biggest insurance brokerage in the world, Marsh & McLennan is parent to insurers Marsh, Putnam, human resources consulting firm Mercer, Guy Carpenter reinsurance and Kroll risk assessment, and through its subsidiaries, employs 55,000 people in 100 countries.
In recent years, the company has suffered regulatory setbacks. Putnam specifically was central to the 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, 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 a company statement.
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.
(c) 2006 Money Management Executive and SourceMedia, Inc. All Rights Reserved.