The Hartford To Cut 500 Jobs Across Country
BY PHIL GUSMAN
National Underwriter News
November 4, 2008
Hartford Financial Services said it will cut 500 jobs across the country as part of a company initiative to reduce expenses by an estimated $250 million by the end of 2009.
The company employs about 31,000 people.
Hartford spokesman David Snowden said the company's initiative includes both non-salaried expense reductions and workforce reductions.
Mr. Snowden said the company will cut jobs in life, property-casualty and corporate operations, with announcements regarding the layoffs occurring by the end of this month.
He added that 125 of the affected jobs are located in the company's Hartford, Conn. headquarters, with the rest of the jobs located in offices around the country. Actual last day of employment for the affected workers will vary depending on the department, Mr. Snowden said.
The Hartford reported a 2008 third-quarter net loss of more than $2.6 billion last week, but Mr. Snowden would not confirm whether the initiative to reduce the 2008 expense run rate was directly connected to the announcement. Regarding the initiative, he said, "It's certainly something that's been in the works for some time."
Mr. Snowden added, "In today's economy, companies are making prudent spending decisions."
Affected employees will be eligible for severance packages as well as access to the company's career transition services "to explore positions both inside the company and outside the company," according to Mr. Snowden.
Additionally, Moody's Investors Service has downgraded the senior unsecured debt rating of The Hartford Financial Services Group Inc. to "A3" from "A2," and its short-term debt rating to "Prime-2" from "Prime-1." The rating outlook is stable.
Jeffrey Berg, senior vice president of Moody's, said, "The Hartford's recently released final third-quarter results and continuing weakness in both credit and equity markets have confirmed our concerns."
Moody's also affirmed the company's lead p-c and life insurance operating companies' "Aa3" insurance financial strength. The ratings outlook for the life insurance operating subsidiaries remains negative, after being changed to negative from stable on September 25 and affirmed on October 8.
The outlook for the p-c insurance operating companies remains stable.
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