Reno, Nev.-based Employers Holdings Inc., a Nevada-based company whose subsidiaries are specialty providers of workers’ compensation insurance focused on small- and medium-sized businesses, announced a strategic restructuring plan that includes a staff reduction of approximately 14 percent of the company’s total workforce, and a planned consolidatino of corporate activities into its Reno headquarters.
The company said the restructuring is designed to achieve the corporate and operational objectives set forth as part of its recently completed acquisition and integration of AmCOMP Inc., and in response to current economic conditions. As a result of its actions, Employers expects to achieve pre-tax cost savings of approximately $12 million in 2009 and annualized pre-tax cost savings of $20 million to $22 million beginning in 2010. The 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 2009.
“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,” said Douglas D. Dirks, president and CEO. He noted the restructuring plan is consistent with objectives the company established when it announced its AmCOMP acquisition in January 2008.
Employers geographic offices and underwriting functions will remain in place. A Regional Field Operation organization 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, companywide.
The job eliminations are anticipated to be in large part complete by mid-year 2009, and all of those impacted by the actions will be eligible for severance benefits and outplacement support.
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