GLOBAL – Mercer’s retirement revenues were flat in the third quarter as its troubled parent firm Marsh McLennan Companies announced it would cut 3,000 jobs globally.
MMC, hit by an insurance bid-rigging scandal, said that retirement services revenues at its Mercer consulting arm were “essentially flat”. It was up 11% to 333 million dollars under US generally accepted accounting principles – but off one percent on an underlying basis, stripping out the impact of currency and other factors.
Overall, Mercer’s revenues and operating income were up 11%, at 766 million dollars and 106 million dollars respectively.
MMC’s Putnam Investments asset management arm, which has agreed a 40 million-dollar settlement with the Securities and Exchange Commission over its own improper trading scandal, posted institutional assets under management of 69 billion dollars.
This is down from the 101 billion dollars it managed 12 months before but up from 65 billion dollars at the end of June 2004. Putnam's revenues fell 16% to 429 million dollars.
The Mercer and Putnam numbers came as MMC said it would cut thousands of jobs globally to lead to annual cost savings of around 400 million dollars.
“On a global basis, we are reducing staff by five percent, or approximately 3,000 positions, with three quarters coming from risk and insurance services,” said new chief executive Michael Cherkasky.
“This includes staff reductions associated with the previously announced combination of the defined contribution administration business of Putnam with Mercer's human resources outsourcing operations as well as the integration of Kroll.”
He also said: “Employees are the lifeblood of our organization, and we know they have been hurt by the situation at Marsh. As a result, we are in the process of developing compensation programs to retain, motivate, and reward employees.”