The Chicago-based brokerage said that it expects the restructuring to result in cumulative pre-tax charges of approximately $360 million from workforce reductions, lease consolidation and other related costs, netting $420 million in annualized savings by 2010.
“As we continue to make investments globally to better serve our clients, we remain equally committed to improving operational excellence,” Aon President and Chief Executive Officer Greg Case said in a statement.
“This restructuring plan has a similar approach to that of our 2005 restructuring plan, which has had very positive results.”
Aon said that its 2005 three-year restructuring plan, which is estimated to cost $365 million and is “substantially complete,” is on track to achieve annualized cost savings of about $280 million by 2008. That plan, which came on the heels of industry investigations led by former New York Attorney General Eliot Spitzer, resulted in a net reduction of about 3,600 employees.
Of the 2,700 positions that will be eliminated as part of its latest restructuring, Aon said 1,100 will be take offshore or outsourced.
In addition to further global consolidation of its human resources, finance and information technology functions, Aon said it also will review options to consolidate and simplify its European operations on a per-country basis, focusing on shared service functions, real estate, and offshoring or outsourcing of positions.
Aon reported total revenues of $7.28 billion for the first nine months of 2007, an 11.2% increase compared with the same period last year. It reported profits of $657 million for the first nine months of 2007, a 32.2% increase over the 2006 period.