The insurer intends to let thousands of people go in an effort to reduce its costs, say reports.
Allstate Corporation plans to use thousands of insurance job layoffs to try to cut costs, say several reports.
The news came directly from the insurer’s CEO who discussed it in a recent video conference call.
Allstate CEO Tom Wilson held a video conference call with his senior team leaders. In that call, he talked about the fact that thousands of insurance job layoffs were on their way. These “thousands of jobs” would be eliminated from all operation levels within the insurance company. Wilson also stated that he would be releasing additional details with regards to the employment situation in the not too distant future.
Bloomberg reported on the story and attempted to contact an Allstate representative for comment on the lost jobs but was unable to obtain a timely response on the matter.
This has the potential to lead to some substantial employment changes at Allstate. According to a filing with the US Securities and Exchange Commission, the insurer had 45,789 employees by the end of last year.
There have been a number of speculations as to why the insurance job layoffs are occurring.
Bloomberg’s report guessed that the insurer may be placing itself in a position that will allow it to enter into a “price war” against its top industry rival, State Farm. This speculation makes sense as State Farm has been reducing its rates across the United States by an average of 11 percent. These reduced rates will begin as of July.
Despite the fact that Allstate has provided its own auto insurance policyholders with a number of monthly rebates since the start of the COVID-19 crisis, it hasn’t actually reduced the rates that its customers will be paying over the longer term.
It is this difference between providing temporary rebates in the heart of the crisis and applying rate reductions moving forward that has news outlets speculating about the true purpose of the insurance job layoffs that Wilson discussed in the call. Many wonder if the next round of details from the CEO will reveal more as to the purpose of the employment cuts.