Insurance Group announced Tuesday it plans to streamline its organizational structure by cutting 800 jobs around the world by the end of 2015.
The job cuts are expected to eliminate 1.4% of Zurich’s 55,000 employees, primarily those in management layers between the group and its business units. The cuts will not affect customer-facing roles.
Zurich Chief Executive Martin Senn said the insurer’s decision is part of an effort to reduce its costs and improve profitability. By eliminating the positions, Senn hopes to save roughly $250 million annually through the end of next year.
“We continue to make significant progress towards our strategic goal to make Zurich a focused and more profitable business,” he said, adding that the cuts “will be implemented through a measured process, with employees supported at every stage of the transition.”
The move follows Senn’s December announcement that Zurich would either turn around or exit non-core insurance businesses that were underperforming in an effort to boost profits.
Zurich also plans to invest in global corporate and mid-market business going forward, particularly in its commercial business in the US and its retail operations in Switzerland.
Senn said the insurer was committed to growing operating earnings through 2016 by “reducing complexity,” hoping for a return on equity of 12% to 14%, down from its previous goal of 16%.
The announcement comes on the heels of AIG
’s February decision to lay off 3% of its workforce by the end of the year. The job cuts will affect roughly 1,900 AIG
employees, though other members of the insurance industry are already eager to use the layoffs to their advantage.
“If somebody just lost their job at one company, it could be an opportunity to bring them on board. We’re always recruiting,” said AJ Abdelhkalek, a State Farm
agent in Sunnyvale, Calif. “These employees already have their license and background in the industry, and could bring a lot of talent to someone like me.”