Wednesday July 18, 8:42 am Eastern Time
Safeco to cut 1,200 jobs by end of 2003
biz.yahoo.com
SEATTLE, July 18 (Reuters) - Safeco Corp. (NasdaqNM:SAFC - news) on Wednesday said it would cut 1,200 jobs, or 10 percent of its staff, by the end of 2003 as the car, home and business insurer reduces costs in an attempt to boost flagging profits.
The jobs cuts are the first major initiative by new Chief Executive Mike McGavick, who came to Seattle-based Safeco from rival CNA Financial Corp. (NYSE:CNA - news) in January to turn the company around.
Safeco, which has reported lackluster profits over the past few years as a result of lower premiums and rising claim costs, also said it would reorganize its main property casualty insurance operations, giving responsibility for making a profit to Michael LaRocco, the newly appointed chief operating officer of personal insurance lines, and Dale Lauer, chief operating officer of business insurance.
The firm said it would cut 600 jobs this year, including 250 cut at corporate headquarters in Seattle. It said the other 600 jobs would be cut by the end of 2003.
Safeco said the job cuts and reorganization would reduce annual operating expenses by about $100 million. It said associated restructuring charges would be $60 million up to the end of 2003, including a pretax charge against earnings in the third quarter this year of about $40 million, or 20 cents per share after taxes. |
