Farmers Insurance Lays Off 2,400 Employees in Restructuring
California-based Farmers Insurance announced on Monday that it is laying off 11% of its workforce, or 2,400 employees, in a bid to restructure itself for long-term growth.
The jobs being cut are from across all areas of the company, including claims, underwriting, and customer service.
“Given the existing conditions of the insurance industry and the impact they are having on our business, we need to take decisive actions today to better position Farmers for future success,” said Raul Vargas, president and CEO of Farmers Group, Inc., in a statement.
Vargas cited the rising cost of property and casualty insurance, as well as the increasing frequency and severity of natural disasters, as factors that are driving the need for restructuring.
“We are committed to providing our customers with the best possible service, and these changes will allow us to do that more efficiently and effectively,” Vargas said.
The layoffs come after Farmers announced last month that it would stop offering its policies in Florida. The company said the decision was necessary to manage its risk exposure in the hurricane-prone state.
Farmers has also limited new homeowners insurance policies in California because of high costs and wildfire risks. State Farm and Allstate also made similar changes in that state.
The layoffs at Farmers are the latest in a series of job cuts in the insurance industry. In recent months, T-Mobile and CVS have also announced thousands of job cuts. However, the US labor market remains strong overall, with the unemployment rate at a 50-year low.
The layoffs at Farmers are a sign of the challenges facing the insurance industry. The industry is facing rising costs, increasing competition, and changing customer demands. These challenges are forcing insurers to make tough decisions about how to operate in the future.
