Willis Group Holdings will eliminate and relocate some 3,500 workers after its second quarter of failing to meet profit estimates, the insurance brokerage announced Wednesday. The moves are expected to affect 16% of Willis’ international workforce and shrink the company's ratios of seats per employee and square footage of floor space per employee.
According to CEO Dominic Casserley, employees in “support roles” will be moved to lower-cost locations like Mumbai and Nashville, Tenn. Willis also plans to slash jobs to reduce overall headcount of 21,700, though company spokespeople have not indicated how many jobs would be cut or where the losses would be concentrated.
Lease consolidation in real estate and simplification in information technology systems also factor into Willis' efforts to streamline its business.
The moves, which were originally announced in July 2013, are expected to save the company roughly $420 million through 2017 and $300 million each year following.
Willis made the announcement following a first-quarter net income of $1.36 per share, missing the Zacks Consensus Estimate by 4.9%. In the prior-year quarter, net income lagged by 6.9%. Willis was closer to analyst estimates of $1.098 billion for quarterly revenue, missing it just slightly at $1.097 billion.
Meanwhile, total expenses of $771 million at the brokerage remained nearly flat year-over-year.
“We began 2014 with another quarter of solid mid-single digit revenue growth and positive contributions from each of our segments,” Casserley said. “Adjusted operating income matched the prior year, as we continued to invest in higher growth regions such as emerging markets, businesses such as Global Wealth Solutions in Asia, and client service improvements such as our Connecting Willis initiative.”
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