Insurance and reinsurance broker Aon’s global Restructuring Plan, initiated in 2017, is now expected to result in estimated job losses of between 4,800 to 5,400, which is up 12% from the 4,200 to 4,800 expected job eliminations announced in early 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, ultimately improving efficiency, insight and connectivity. The broker states that ongoing restructuring activities are anticipated to impact the business through 2019, “including an estimated 4,800 to 5,400 role eliminations.”
From the plan’s inception through December 31st, 2018, Aon has eliminated 4,366 positions and incurred total expenses of $982 million 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 $200 million, comprised of $150 million of cash investment and $50 million of non-cash charges. As a result of the expanded program, annualised expected savings increased $50 million.
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.
Cumulatively, the plan is expected to result in costs of approximately $1.225 billion, consisting of approximately $450 million in employee termination costs, $130 million in technology rationalisation costs, $65 million in real estate consolidation costs, and $50 million in non-cash asset impairments, as well as $530 million in other costs, which includes certain separation costs related to the sale of the Divested Business.
By the end of this year, Aon says that it expects estimated annualised savings from the restructuring plan and other operational improvement initiatives will be roughly $500 million.