Those impacted will be eligible for severance benefits & outplacement support
Employers Holdings, a provider of workers’ compensation insurance focused on small and medium-sized businesses, has announced a strategic restructuring plan. This plan includes a staff reduction of approximately 14% of the company’s total workforce and planned consolidation of corporate activities into its Reno, Nevada headquarters.
According to the company, the restructuring plan is designed to achieve the corporate and operational objectives set forth as part of its recently completed acquisition and integration of AmComp and in response to current economic conditions.
As a result of these actions, the company expects to achieve pre-tax cost savings of approximately $12 million in 2009 and annualised pre-tax cost savings of $20 to $22 million beginning in 2010. These amounts include previously announced anticipated cost savings of $7.5 million in 2009 and $10 million in 2010. The company expects to incur pre-tax restructuring charges of approximately $3 million in the first quarter of 2009.
Employers have said that its geographic offices and underwriting functions will remain in place. A regional field operation organisation will be implemented with geographic managers maintaining responsibility for day-to-day production, underwriting and profitability within their territories. All other corporate and support functions will be managed centrally in Reno and handled uniformly, across the U.S.
The job eliminations are anticipated to be in large part completed by mid-year 2009 and all of those impacted by the actions will be eligible for severance benefits and outplacement support.
Douglas Dirks, president and CEO of Employers Holdings, said: Given the unprecedented economic climate we and our customers face, additional measures are being taken that we believe are necessary to continue providing competitively priced products and quality services. These decisions are carefully considered and difficult to make, but required given the current environment.