Downtown KC employer DST lays off employees, reportedly hundreds, months after sale

One of Kansas City's largest downtown employers reportedly laid off hundreds of employees Tuesday, a little more than two months after being acquired by a Connecticut-based competitor.

DST Systems Inc., with about 4,000 employees in the Kansas City area, did not respond to inquiries about the cutbacks. Two media contacts for its new parent company, SS&C Technologies Holdings Inc., said they could provide no information.

A statement from SS&C Technologies confirmed a 6 percent cutback across DST's worldwide operation but offered no details about locations or numbers.

“Today, DST laid off approximately 6 percent of its worldwide workforce. While difficult to part with many good people, it is a necessary step to improve customer satisfaction, create a more nimble organization and prepare for the future opportunities of our combined company," said an emailed statement attributed to Bill Stone, CEO of SS&C Technologies.

"We moved swiftly and fairly and have provided generous severance benefits. We wish everyone well in their pursuit of new opportunities in this period of historically low unemployment,”

DST Systems ended 2017 with 14,200 employees, including 7,500 in the United States, but a more recent count was not available. A 6 percent layoff of the December 2017 employee total would affect 852 people.

DST Systems did not report its job cuts to Missouri officials under the Worker Adjustment and Retraining Act, or WARN Act. The act requires companies to report shutdowns and significant layoffs well before they happen.

"The WARN Act provides protection to workers, their families and communities by requiring employers to provide a 60-calendar day notice in advance of covered plant closings and mass layoffs. Employers are encouraged to give workers notice even when WARN does not require it and to work with state and local agencies to help their workers get the transition services they need," according to the Missouri Division of Workforce Development.

Employees walked out of several DST offices Tuesday carrying large white envelopes with information related to their layoffs. Anonymous posts on an online bulletin board focusing on layoffs at DST said the cutbacks began early in the morning.

Although some people confirmed that they and others had been laid off, the former employees said they could not talk about the situation for fear of losing their severance benefits.

Many gathered at restaurants near the several buildings that house DST Systems. One, The Quaff, opened its doors early to accommodate laid-off DST employees.

Unconfirmed reports from inside DST said the job losses totaled in the hundreds. It was unclear where the cuts landed among DST's operations downtown and in other cities.

Rumors of job cuts have circulated since the company agreed in January to a $5.4 billion buyout by SS&C Technologies. The sale was completed in mid-April.

Such mergers between companies with competing businesses often lead to job cuts as the merged business seeks to reduce costs. SS&C Technologies said at the time of the agreement that it expected cost savings of $150 million.

SS&C CEO Bill Stone said at the time that cost savings could come from consolidating facilities of the two companies. This typically involves moving work from one site to another so the first can be closed and its expenses eliminated. Such savings typically include payroll, occupancy, utilities and other costs.

DST provides data processing, fund accounting, pharmacy benefits claims processing and other services, and it operates data centers, notably its Winchester Data Center in a business park near Interstate 435.

In downtown Kansas City, DST employees occupy several large buildings that the company redeveloped as part of a downtown revitalization. Several sit along a stretch of Broadway that carries an honorary designation as Tom McDonnell Way. McDonnell led DST Systems from its founding in 1969 until he retired in 2012.

Steve Hooley succeeded McDonnell as CEO but left the company with the April 16 completion of its sale to SS&C Technologies.

In reports to shareholders, DST said Hooley and other executives were in line to collect significant payouts from shares of DST Systems and from severance, or "golden parachute," agreements with the company.

One of DST's reports said Hooley, finance chief Gregg Givens and general counsel Randall Young each resigned “solely in connection with the merger.” The status of other executives covered by the anticipated payments was unclear.

Hooley stood to collect nearly $38.4 million from his stock, stock options and restricted shares in DST that were bought by SS&C Technologies as part of the merger of the companies, according to the report to shareholders.

Nine other executives, including Givens and Young, were in line to collect a combined $50.5 million through their stock holdings. Add in shares held by other directors, and the total that insiders collected topped $100 million from DST shares purchased by SS&C Technologies.

“Golden parachutes” also were part of the deal, according to DST’s report to shareholders. These included cash severance payments of more than $7 million to Hooley and nearly $9.5 million to four others combined. Their parachutes also included more stock: more than $20.9 million for Hooley and $19.7 million for the four others.

Four other executives were in line to receive change-in-control severance payments totaling more than $7 million. In all, the severance payments totaled $47.6 million, in addition to the stock holdings executives collected on from the company’s sale.

This story was originally published June 26, 2018 at 3:01 PM.