Willis Group Holdings Plc plans to eliminate jobs and relocate 3,500 employees, or about 16 percent of its workforce, after reporting first-quarter earnings that missed analysts’ estimates.

The moves will yield $420 million in cost savings through 2017 and $300 million annually after that, the London-based company said late Tuesday in a statement. Willis, the third-largest insurance broker by market value, said workers will be shifted to lower-cost locations. The company had about 21,700 employees at year-end.

Willis dropped 3.5 percent to $41.68 at 9:41 a.m. in New York trading, the biggest decline since February. Quarterly operating earnings per share was $1.36, compared with the $1.40 average estimate of 16 analysts surveyed by Bloomberg.

The “EPS miss and the apparent need for an extensive operational improvement program” will weigh on shares, said Meyer Shields, an analyst at KBW in a note to investors.

CEO Dominic Casserley plans to move “support roles” to reduce the percentage of employees in higher-cost locations to 60 percent from 80 percent, according to the statement. Willis said in a filing that low-cost sites include Mumbai and Nashville, Tenn.

‘More Action’

“As we continue to invest to grow revenues, we also have an opportunity to take more action on expenses,” Casserley said in the statement.

Miles Russell, a spokesman for Willis, declined to say how many jobs would be cut or which locations would lose positions. Chicago’s Sears Tower, the second-tallest building in the U.S. behind One World Trade Center in New York, was renamed the Willis Tower in 2009 after the broker moved about 500 employees into the building.

First-quarter net income rose 12 percent to $246 million, or $1.35 a share, from $219 million, or $1.24, a year earlier.