Up to 3750 jobs at risk from Marsh's acquisition of JLT

Redundancy

Marsh expects to save around $250m in “cost synergies” from the acquisition of JLT, with up to 3750 jobs at risk.

Between 2% and 5% of JLT and Marsh & Mclennan’s combined global workforce could be affected. According to a market announcement, roles across the UK, Europe, Asia, North America, the Middle East and the Pacific could all be under threat in the three years following the $5.6bn (£4.2bn) purchase, which has only been on the boil since 7 September.

The announcement reads: “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. 

“Based on this preliminary evaluation, MMC expects a potential headcount reduction of between 2 and 5% 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.”

MMC CEO Dan Glaser confirmed that there would be some “overlap”, but suggested that some cost-cutting would come from slicing duplicated expenses. MMC has an employee turnover of around 10% a year. Some of the gaps could be filled by a natural attrition, Glaser suggested.

Glaser said: “When I look at the businesses – obviously we are in the same businesses in certain areas, so there is going to be some duplication and overlap in some businesses. If I give you some examples, clearly JLT is a public company, so are we. We’ve got public company expenses. So do they. We don’t need both of them.

“If I look in real estate, technology, particularly infrastructure, clearly we are both big companies. We use vendors and outside services, I think we can do a lot more combinations of that.

“Functional areas, back office areas, those are key critical strategy parts of the business, but there is some overlap in areas such as finance, legal, HR, risk and compliance service centres and call centres we both have.”

He added: “The other point I want to bring out, and I was thinking about this just over the past couple of days, this is natural attrition in the business. MMC has employee turnover of let’s say around 10% a year. That means 6500 exit our firm every year. So for the sake of argument, that is around 500 people per month. I would say that we and JLT just take a pause right now.

“The person who could fill that spot might work for the other organisation. So we have to be cautious about how we manage our existing headcount and let that natural attrition that occurs in business work in our favour over time. I do think that will be a part of that overall cost savings.”

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