US auto Insurer Allstate is reportedly planning to lay off thousands
of its employees in a bid to cut down costs.
Allstate global CEO Tom Wilson told senior team leaders, in a recent video conference, that ‘thousands of jobs’ at all levels of the company’s operations will be affected by the layoffs.
More details regarding the layoffs are anticipated to be announced shortly by Tom Wilson.
Bloomberg said in a report that it reached out to an Allstate representative for a comment on the matter, but did not receive a timely response.
According to the US Securities and Exchange Commission filing by the company, it has 45,780 employees as of the end of last year. The vast majority of its staff are in North America.
It is speculated that Allstate may be preparing for a ‘price war’ against its major competitor, State Farm.
State Farm is dropping its insurance rates by 11% on average across the US. The State Farm rates in Illinois are expected to fall around 14% next month.
In April, Allstate Canada collaborated with Pembridge Insurance Company and Pafco Insurance Company (ACG) to launch ‘Stay at Home Payment’ of more than $30m.
CHICAGO -- Allstate Corp. is cutting 4,000 jobs as it transforms itself to give customers the option of buying insurance policies over the Internet or via telephone.
The move will eliminate the need to go through the company's 15,200 agents, the insurance company said Wednesday.
To pay for the move onto the Internet, Allstate plans to reduce annual expenses by about $600 million by eliminating 4,000 non-agent positions by the end of next year. The positions will be eliminated through layoffs and attrition.
A field support center will be closed. Allstate previously announced the closing of four regional offices.
''We will combine the power of our agency distribution system with the growth potential of direct selling and electronic commerce, and at the same time take advantage of the enhanced sales and service potential of the Internet,'' Edward Liddy, Allstate president and chief executive, said in a statement. ''This unique combination ... will make Allstate the most customer-focused company in the marketplace.''
Allstate customers who came to the insurer through an agent will have access to the Internet service. And customers who buy insurance through the Internet will be able to consult a local agent for sales or service if they want.
The insurer said it will begin offering the services in about 16 states in May, and the rest of the nation by the end of 2001.
About 460 jobs will be lost at the company's headquarters in the Chicago suburb of Northbrook. The regional offices to be closed are in Kansas City, Kan.; Hudson, Ohio; Farmington, Conn.; and Orange, Calif.
Last month, Allstate said third-quarter operating income fell 36 percent, in part because of competition that has forced auto insurers nationwide to lower their rates.
Analyst Alice Schroeder of PaineWebber said Allstate's move is long overdue. ''Internet and 800 numbers are important to maintaining and extending its brand,'' she said. ''So if Allstate wanted to maintain its growth, this move was essential.''