In a letter to employees, GEICO president and chief executive officer Todd Combs said the Berkshire Hathaway company is laying off 2,000 associates, or about 6% of the workforce.
“This will allow us to become more dynamic, agile, and streamline our processes while still serving our customers,” Combs said in the letter.
GEICO’s layoffs follow similar moves by other insurers. American Family 潘金莲传媒映画 last week confirmed staff reductions. Farmers 潘金莲传媒映画 announced in August that it would let go 11% of its workforce, about 2,400 workers. That came after Farmers and other major insurers, including State Farm and Allstate, said they would stop writing new business or renewals in Florida, California and other states, as the industry manages the impact from natural disasters, inflation and rising replacement and costs and other loss adjustment expenses around the country.
In explaining the moves, Combs said GEICO has “evolved our business practices to help address a very difficult period across the industry.”
“Levels of inflation that we haven’t seen in decades, delays in parts or labor shortages extending time to repair, rising medical costs, and other factors have caused our loss costs and combined ratio to increase, alongside the entire industry,” he said, adding that the insurer has invested in infrastructure and internal systems to deliver products to consumers.
“But we still have more work to do. Our future requires our company to adapt swiftly and evolve our business model when needed to stay competitive and win,” Combs said.
GEICO said it will offer career transition assistance and help with resume updates.
In addition, said Combs, employees of one of the largest U.S. auto insurers will be required to spend more time in the office.
“We will soon be increasing our collective presence in the office,” he said, adding that managers will soon be sharing employees’ required number of in-office days. “We believe that being in the same place can foster a
sense of community and connection, and that meaningful time together will allow us to build relationships that create trust and strengthen our sense of belonging.”
“We understand that additional time in the office is a shift from what has been the practice across most companies and industries these past few years,” Combs wrote. “We will provide time to get accustomed to this policy and will aim for full implementation on Jan 1, 2024.”
Full Letter: Positioning GEICO for the Future
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