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Western Union cuts executive ranks

Western Union cuts executive ranks

Western Union will slash its executive ranks and book $80 million in restructuring charges through next year as it reorganizes its money transfer and payments business, the company said Thursday.
The changes will result in fewer reporting layers in management, the company said.
Among the 175 total eliminated positions will be executive vice presidents, senior vice presidents and vice presidents. One new executive vice president position will be created to focus to electronic channels and new consumer and business customer segments. Most of the management changes will take place in the next 30 days.
Western Union also plans to close, consolidate, and downsize facilities and create a new regional operations center in Europe. Business operations changes will take place over the next 18 months.
Of the $80 million in charges, about $75 million will be for severance, facility closure and related costs. Most of the charges will be booked this year, but some will spill over into 2011.
Western Union expects to save about $50 million a year. That will accelerate from $10 million this year to $30 million to $40 million next year and $50 million by 2012.
The charges and savings were not included in the company's guidance.
In addition to the job cuts, Western Union said the changes will lead to the "migration" of about 550 positions. Company spokesman Tom Fitzgerald said some, but not all of those positions involve the European operations center. He could not say if any of those slots will be eliminated after employees are given the chance to move to new locations.
The structural changes come exactly one month after Chief Operating Officer Hikmet Ersek was named president and CEO. Ersek will take over on Sept. 1 when Christina Gold retires.
In morning trading, shares of The Western Union Co. rose 27 cents to $15.93. The stock has ranged from $15.11 to $20.64 in the past 52 weeks.


Updated : 2020-12-05 14:18 GMT+08:00