Marsh and McLennan Group (MMC) expects to cut up to five percent of its workforce following the acquisition of Jardine Lloyd Thompson Group (JLT).
On Tuesday, MMC agreed a deal for the acquisition of JLT worth $5.6 billion as part of its strategy to become the preeminent global firm in the areas of risk, strategy, and people.
Expected to close in spring 2019, the transaction is subject to receipt of required antitrust and regulatory approvals, and the approval of JLT shareholders.
In a filing to the US Securities and Exchange Commission (SEC), MMC revealed that it had not yet received sufficiently detailed information to make comprehensive plans or intentions regarding the impact of the JLT acquisition, but from preliminary acquisitions, the group predicted a cut to the workforce of up to five percent.
MMC stated: “MMC expects a potential headcount reduction of between two and five percent of the total combined group workforce across all geographies, including in the UK, Continental Europe, Asia, North America, the Middle East, Latin America, and the Pacific, and from a broad range of job categories, including functional support areas such as finance, human resources, IT, operations, legal and administrative support staff.”
A five percent cut of the combined workforce would mean the loss of an estimated 3,750 jobs.
“MMC’s preliminary evaluation suggests that MMC is expected to achieve synergies of approximately $250 million within three years of completion of the Acquisition, a substantial portion of which could come from headcount reductions in addition to savings in real estate, IT, outside services and other initiatives.
“The finalisation and implementation of any workforce reductions will be subject to comprehensive planning and appropriate engagement with stakeholders, including affected employees and any appropriate employee representative bodies.”
The SEC filing also showed that MMC expected all non-executive directors at JLT will cease to be directors of JLT and that subject to the workforce reductions described earlier in the article, MMC “does not intend to make any material changes to the balance of skills and the functions of the employees of JLT.”
