As part of a global initiative to reduce costs and improve efficiency, SWIFT has started a restructuring of its North American Commercial organization that has resulted in a number of layoffs and other cost-cutting measures. Other SWIFT groups in North America will follow in the restructuring plan.
The moves are part of the [email protected] initiative, which aims to make the organization more efficient and remove 90 million euros (US$132 million) in global recurring operating expenses by the end of 2010, said Joanne Healy, head of public relations, Americas, at SWIFT. SWIFT, the provider of secure global financial messaging services, would not disclose the number of people who have left the organization. The [email protected] program is designed by McKinsey & Company.
"This is an 18-month program," says Healy. "We have made a commitment to the board to cut recurring operating expenses 90 million euros by end 2010. Given that manpower costs are a large part of the cost base, there have been some reductions. [email protected] is being rolled out in waves across SWIFT and we are in the middle of the wave that impacts the Americas commercial organization.
"It is not just about cutting head count," adds Healy. "It is about making the operations more efficient." Healy also could not comment on what percentage of the operating cost reductions could be attributed to layoffs.
The Commercial organization in North America is the smallest of SWIFT's groups in North America, with about 60 employees, says Eva Zaeschmar, head of stakeholder relations, Americas, at SWIFT, adding that other groups, including the Technical group, are much larger.
SWIFT's North American groups include the Commercial, Technical (IT and Operations) and a Support Center Group, according to David Pryce, managing director, Americas, at SWIFT. "Of the staff in North America, one-third of the organization has gone through the Lean process," says Pryce. "The rest will start later. We are looking to reduce operating costs so we pass the savings on to our clients. The idea is not to impact services, it is to increase efficiency and to free up costs to expand to additional businesses in North America." The Technical and Support groups are located in Virginia, says Pryce. SWIFT's main U.S. office is in New York and there is an office in San Francisco that was opened in July 2008.
Pryce says that many of the head count reductions come from a hiring freeze that has been in place since the beginning of the year. Many open positions will not be filled as the organization finds efficiencies through the [email protected] process, he says. Some other reductions come from early retirement packages that were offered to longtime employees and the remainder will come from layoffs, Pryce added.
"We are halfway through [email protected] right now, but it was announced earlier in the year," Pryce says. "SWIFT is committed to reducing the amount of cost to the organization without impacting the service levels. The idea is to lower costs to the industry."
This past September at the SIBOS conference in Hong Kong, SWIFT CEO Lazaro Campos outlined [email protected] to the audience. "Our target for increased efficiency is 30 percent," according to the transcript of Campos' speech. "Yes, you've heard correctly. 30 percent ... In fact, the approach should also enable us to improve the service we offer. Twenty percent will translate into short-term structural cost reductions. The remaining 10 percent will fund our future."
This article originally appeared on Wall Street & Technology, a sibling brand of Bank Systems & Technology.
Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio