On the heels of its $4.9 billion acquisition of Hewitt Associates, Chicago-based Aon Corp. announced a three-year restructuring plan that it expects will save the company $280 million annually.
Intended to streamline operations across the risk management services and reinsurance brokerage, the restructuring came to light in a filing with the Securities and Exchange Commission.
“The restructuring plan is expected to result in cumulative costs of approximately $325 million through the end of the plan, primarily encompassing workforce reduction and real estate rationalization costs,” the filing states. “The total estimated cost of $325 million consists of approximately $180 million in employee termination costs (all of which is expected to be incurred in cash) and approximately $145 million in real estate rationalization costs (of which approximately $95 million is expected to be incurred in cash). An estimated 1,500 to 1,800 positions globally, predominantly non-client facing, are expected to be eliminated as part of the plan.
In addition to the $280 million of annual savings related to the restructuring plan, the company expects additional savings in areas such as information technology, procurement and public company costs for total savings of $355 million annually by 2013.