Farmers Insurance to lay off 2,400 workers across its entire business | CNN Business (2024)

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Farmers Insurance to lay off 2,400 workers across its entire business | CNN Business? ›

Farmers Insurance to lay off 2,400 workers across its entire business. California-based Farmers Insurance said Monday it is laying off 11% of its workforce — or 2,400 employees — in a bid to restructure itself for long-term growth.

The Woodland Hills-based insurance giant said it was responding to the current state of the industry, which in recent years has been plagued by skyrocketing costs and, in some areas, unprecedented disaster risk. The company cut around 2,400 employees, including 369 who reported to the Woodland Hills headquarters.

Major Layoffs Industry-Wide

From big brands to insuretechs like Hippo that laid off roughly 20% of its employees, the cuts are undeniable. CEOs cite several drivers behind their decisions, from restructuring to improving efficiency to automation to re-evaluating product offerings.

For regular professional staff, layoff is the elimination of a position due to a lack of work, a lack of funds and/or because of a reorganization. Reducing a professional staff position's percent time or months worked per year are not subject to the layoff process.

California-based Farmers Insurance said Monday it is laying off 11% of its workforce — or 2,400 employees — in a bid to restructure itself for long-term growth.

Zurich Insurance Group

Zürich Versicheru... AG

Businesses look to cut costs to cover their increased expenses due to inflation. Laying off employees is typically one of the first cost-cutting measures because they are one of the largest company expenses. Tech companies lose revenue when businesses cut back advertising.

Financial issues are a common reason for layoffs. If a company isn't performing well financially, a simple short-term solution is to save on payroll and benefit costs by eliminating members of teams. This immediately reduces costs and can infuse the cash into areas of the business that need it.

Cost was the main reason employers did not offer health insurance (75.8%), followed by high employee turnover (41.9%) and that most employees are covered elsewhere (25.8%; see Figure 2).

The retailer also said “the majority” of remote workers and those at offices in Dallas, Atlanta and Toronto, must relocate — mostly to its Arkansas headquarters.

Why did Amazon fire 200 employees? ›

"After our initial restructuring in April, it became clear that we needed to focus our resources even more on the areas that are growing with the highest potential to drive our business forward," said Christoph Hartmann, vice president of Amazon Games, in the Nov. 13 email.

FedEx is shuttering four facilities in southwestern Florida in 2024, according to Worker Adjustment and Retraining Notification (WARN) Act notices filed on April 17. The four closures will result in the layoff of 220 couriers and eight managers.

In most cases, the non-essential departments are most vulnerable. When business slows down, departmental projects are diverted to another department, and business is focused away from your team, it might be another one of the signs that a company is failing and a layoff is coming.

Instead, get laid off. If you quit or get fired, you get no benefits, such as unemployment or health insurance. But if you get laid off, you can receive a severance payment, unemployment benefits, subsidized health insurance, strong referrals, and so much more.

Three main methods of selecting employees for layoff are "last in, first out," in which the most recently hired employees are the first to be let go; reliance on performance reviews; and forced rankings, said Kelly Scott, an attorney with Ervin Cohen & Jessup in Los Angeles.

Financial issues are a common reason for layoffs. If a company isn't performing well financially, a simple short-term solution is to save on payroll and benefit costs by eliminating members of teams. This immediately reduces costs and can infuse the cash into areas of the business that need it.

Farmers Insurance has laid off 2,400 employees as the entire insurance industry grapples with increased risks and rising operating costs.

NEW YORK (AP) — Farmers Insurance said Monday it will lay off 11% of its workforce — about 2,400 employees — as part of a corporate restructuring aimed at increasing its efficiency and long-term profitability. The California-based insurer said the job cuts will impact all lines of its business.

At the same time, AM Best has affirmed the Long-Term Issue Credit Ratings (Long-Term IR) of “bbb+” (Good) on the outstanding surplus notes of Farmers Insurance Exchange (Woodland Hills, CA) and Farmers Exchange Capital (Wilmington, DE). The outlook of these Credit Ratings (ratings) is stable.