ING to cut 7,000 jobs, expects FY08 loss at euro 1 bn

Dutch financial services major ING today said it would slash as many as 7,000 employees globally as part of its cost-cutting exercise, adding that it expects its net loss for the financial year 2008 to be at euro 1 billion ($1.30 billion).

The financial services major would also tap Dutch State Guarantee for reducing its illiquid assets portfolio.

"Under the terms of the back-up facility, a full risk transfer to the Dutch government would provide cover on 80 per cent of euro 27.7 billion illiquid portfolio under the Residential Mortgage Backed Security (RMBS) at ING Direct USA and ING Insurance Americas," the statement added.

As part of its cost-cutting measures, ING said it would reduce operating expenses by euro one billion in 2009. "The structural expense reduction will lead to annual savings of approximately euro 1.1 billion from 2010 onwards. Of the cutback, 35 per cent will come from a reduction of the workforce by approximately 7,000 full-time positions in 2009," the statement said. ING employed 1,24,634 people in 2007.

ING, which is scheduled to announce its FY08 results on February 18, said, "The workforce measures will be made in accordance with local regulations and will be discussed with the respective stakeholders."

Further, the board of ING has designated Jan Hommen as CEO of ING Group, following the stepping down of Michel Tilmant from the Executive Board.

Hommen, currently Chairman of the Supervisory Board of ING Group, would assume charge as CEO after the shareholders' meeting on April 27. Peter Elverding will succeed Hommen as Chairman of the Supervisory Board.