Initiated in 2017, Aon’s global restructuring plan has now estimated the number of job losses between 4,800 and 5,400, a 12 percent increase from a previous announcement in 2018.
The updated range was announced in the global broker’s most recent annual 10-K filing, which, alongside details of the company’s financial performance through 2018, also discusses Aon’s restructuring plan in connection with the sale of its Divested Business.
The restructuring plan is intended to streamline processes across the organisation improving efficiency, insight and connectivity.
The broker states that on-going restructuring activities are anticipated to impact the business through 2019.
From the plan’s inception through 31 December 2018, Aon has terminated 4,366 positions and incurred total expenses of $982mn for restructuring and related separation costs.
According to its annual 10-K filing, in Q4 2018, Aon expanded its restructuring plan, which led to additional expected costs of $200mn, comprised of $150mn of cash investment and $50mn of non-cash charges. As a result of the expanded program, annualised expected savings increased $50mn.
The program is expected to finalise in the final quarter of 2019, and Aon says that it does not expect any further changes to costs or savings prior to completion.
Combined, the plan is expected to result in costs of approximately $1.225bn, consisting of approximately $450mn in employee termination costs, $130mn in technology rationalisation costs, $65mn in real estate consolidation costs, and $50mn in non-cash asset impairments, as well as $530mn in other costs, which includes certain separation costs related to the sale of the Divested Business.
By the end of 2019, Aon says that it expects estimated annualised savings from the restructuring plan and other operational improvement initiatives will be roughly $500mn.