ING Group to layoff 7,000 employees; replace CEO
With a second successive quarterly loss on the cards for ING Group NV, the company plans to layoff 7,000 employees, and appoint Jan Hommen - the present chairman of the ING board, and the former chief financial officer of Philips Electronics - as its new CEO in the place of the current chief executive Michel Tilmant.
ING - the biggest Dutch financial-services company - is likely to post a net loss of about 1 billion euros for the full 2008 year; the loss resulting partly from ending its Argentina pension operations, and from the cost incurred by disposing off an insurance business in Taiwan.
This year, ING intends cutting its operating costs by 1 billion euros, which will bring about yearly savings of almost 1.1 billion euros, beginning 2010. The announced 7,000 job-cuts - or 5.4 percent of the total workforce - constitute 35 percent of the cost-cutting measures. In addition, costs will be cut in marketing, its head office operations, and on its Formula One sponsorship.
ING also plans shifting to the Dutch government the risk on 80 percent of its 27.7 billion euros of illiquid assets in Alt-A mortgage securities, which are in-between loans - with the subprime loans expended to borrowers with poor credit on one side, and loans issued to prime borrowers on the other.
According to the bank, the transaction "will significantly reduce the uncertainty regarding the impact on ING of any future losses in the portfolio."
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