A major wall Street player is cutting 1,500 jobs and accelerating automation

Key Points
  • The Boston-based bank says it is cutting about 6 percent of the workforce in high-cost locations.
  • The layoffs include a 15 percent reduction of senior management.
State Street Financial Center building, which houses the company's headquarters, in Boston, Massachusetts.
Brent Lewin | Bloomberg | Getty Images

Custody banking giant State Street is scaling back its workforce and upping its reliance on technology.

The Boston-based firm said Friday it will reduce its employee count by 1,500 jobs in high-cost locations. The layoffs amount to roughly 6 percent of its total workforce, including a 15 percent reduction of senior management.

The move will help cut costs and make room for "benefits of automation and standardized global processes," State Street said in its earnings statement.

"While we have made progress on our technology transformation, much remains to be done and we are not satisfied with our recent performance," CEO Ronald O'Hanley said in the statement. "Structural costs are still too high and our automation efforts have not moved fast enough."

State Street says it is responsible for custody, or storing securities on behalf of the client, for more than 10 percent of the world's assets. It is one of the top firms for the vital but not-so-glamorous job of holding mutual funds and other assets for clients like Fidelity. State Street is also one of the top ETF providers along with names like Invesco and Schwab.

The firm beat Wall Street's expectations for the fourth quarter, bringing in $1.68 adjusted earnings per share vs. $1.67 expected by analysts. Its fourth quarter revenue was $2.99 billion vs. the $2.98 billion expected.

Shares State Street rose 1 percent Friday morning. The stock is up 17 percent this month but down about 30 percent in the past year.