Insurance broker Aon says the cost of a restructuring plan put in place when it bought Hewitt Assoc. in 2010 is $86 million higher than its initial estimate and the company is eliminating 1,100 more jobs than its initial estimate.
In a filing with the Securities & Exchange Commission, Aon says the total cost of its global restructuring plan will come to approximately $411 million. The firm says the Aon-Hewitt plan includes the elimination of 2,900 by the end of this year. As of the end of the first half of 2013, Aon says it has eliminated 2,420 jobs at a cost of $225 million.
The plan calls for the consolidation of lease property, which has amounted to $89 million since 2010. Total charges also include $14 million for asset impairments and $6 million in other costs involving moving costs, consulting and legal fees.
On Friday, the London headquartered insurance brokerage firm reported second quarter results that included restructuring expenses of $53 million in the quarter, $40 million higher than the previous year.
When Aon announced the restructuring plan in 2010, the firm planned to eliminate 1,500 to 1,800 positions and consolidate real estate at a cost of $325 million for an annual savings of $355 million.
In the filing, Aon says it expects its restructuring plan to deliver savings of approximately $327 million in 2013 and $378 million in 2014. Actual total savings, costs and timing may vary from its estimate “due to changes in the scope or assumptions underlying the plan,” the broker says.
Aon's restructuring stems from its 2010 acquisition of the human resource consulting firm Hewitt for $4.9 billion.
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