State Street to cut 630 jobs

State Street Corp. said it would lay off 630 employees, or 2 percent of its work force, including 260 people in Massachusetts, and sounded a cautionary note on the economy even as it reported higher profits.

In speaking on a conference call with financial analysts Friday, Joseph L. Hooley, State Street’s chairman, president, and chief executive, said that the Boston financial services giant was cutting jobs to create a “leaner, more efficient, and more profitable enterprise.”

In a regulatory filing, State Street said that it is making “targeted staff reductions” that will reduce its corporate head count in order to “better align State Street’s expenses to its business outlook for 2013.”


The company employs 30,000 people worldwide, including 12,000 in the United States.

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State Street said the layoffs would cost $139 million in 2013.

In mid afternoon trading Friday, State Street shares were up $2.85, or 5.66 percent, to $53.23.

State Street said that its fourth-quarter revenue of $2.45 billion increased 6 percent from the fourth quarter of 2011.

Net income for the fourth quarter rose 26 percent to $468 million, or $1 per share.


For the full year, State Street reported $9.65 billion in revenue, up 0.6 percent from 2011. Earnings per share for the year climbed 10.8 percent to $4.20.

“The fourth-quarter and full-year 2012 reflect continued resilience across our asset servicing and asset management businesses,” Hooley said in a statement. “We achieved these results in a restrained revenue environment, generating positive operating leverage and continuing to invest in key markets that position use for further growth.”

State Street executives sounded a tone of caution, saying they expect a “continued challenging operating environment” in 2013.

Beth Healy can be reached at