TransUnion to shift additional roles to GCCs, eliminate positions to cut costs

TransUnion announced the next step in its ongoing, multi-year transformation effort to optimize its operating model and advance its market-leading technology. The Company will transition additional roles to its successful Global Capability Centers to improve productivity, reduce costs and fund growth. TransUnion will also leverage Neustar’s cloud-native technology to create its next-generation integrated data management, identity resolution, analytics and delivery platform. The Company believes these actions will reduce costs, accelerate innovation and increase organic growth. The Company expects to deliver $120 to $140 million of annualized operating expense savings and a $70 to $80 million capital expenditure reduction in 2026 relative to 2023 levels. Approximately half of the operating expense savings, which exclude depreciation and amortization, are expected to be realized in 2024. This initiative encompasses two components: Optimize Operating Model: TransUnion established its award-winning GCC network in 2018 to centralize, standardize and automate work in locations with deep talent pools. Since then, the network has grown to more than 4,000 employees, or about one-third of TransUnion’s employee base, in India, South Africa and Costa Rica, supporting a wide range of functions. The Company plans to transition additional roles to the GCC locations over the course of the next two years, driving material cost savings and productivity benefits. In addition, the Company plans to eliminate roles in the near-term to further reduce operating expenses. Expand Technology Capabilities: TransUnion expects to successfully complete its cloud migration, called Project Rise, by the end of 2024 as planned. This initiative migrates the majority of TransUnion’s technology applications to a new software foundation within leading public clouds. TransUnion intends to further leverage Neustar’s state-of-the-art technology to streamline its product delivery platforms, achieve material savings and increase innovation velocity. This new, integrated product platform, branded OneTru, will provide customers with seamless access to TransUnion’s broad portfolio of data, solutions and capabilities for more rapid product development and commercialization. To capture the benefits, TransUnion expects to incur approximately $355 to $375 million of one-time pre-tax expenses, with the majority incurred by the end of 2024. Employee separation and facility exit costs are expected to make up approximately $155 million of the total. The remaining expense includes approximately $65 million already planned and communicated to complete Project Rise plus approximately $145 million to implement OneTru and optimize the operating model. Capital expenditures are expected to increase to 9 percent of revenue in 2024 and return to 8 percent in 2025. In 2026 and going forward, the Company expects capital expenditures to be 6 percent of revenue. Altogether, the program is expected to impact approximately 10 percent of the Company’s current workforce through relocation to the GCC locations and position eliminations. TransUnion expects to make these investments while continuing to prioritize debt prepayment with a targeted net leverage ratio of 3.0x.