Nationwide said Friday it plans to reduce its workforce by about 5% over the next year.
The insurance and financial services company said the cuts would be made to its property and casualty operations and technology teams. There would be no cuts to the company’s financial services operations. Nationwide said it expected the cuts to be made with minimal layoffs.
“Over the next year we anticipate (property and casualty) and some of its supporting functions including technology, will operate collectively with fewer positions,” Nationwide said in a statement. “This is due to a variety of factors including employees voluntarily moving to other roles within and outside Nationwide, not filling vacancies where possible, slowing business in underperforming lines, and changes to the operating model.”
Nationwide said the reductions were necessary due to “evolving business needs.”
“As the market changes and the company continues its modernization journey, we are positioning our property and insurance teams and supporting technology teams to serve our members and agents for years to come. These periodic business strategy updates typically include staffing changes — with some areas added and others reduced — based on evolving business needs.”
How many jobs will be affected and where they will be located is difficult to say at this time, the company said Friday.
Nationally it employs about 24,000 workers, including about 11,000 in Ohio, so 5% of that would be about 1,200 jobs.
“We cannot speculate on the total impact on employment,” the company said. “Qualified employees are welcome to apply for the hundreds of open positions we have across the country.”
Nationwide is relying on employee reductions and not filling vacant positions to reduce the need for layoffs.
“Termination is always a last resort, and we will support our employees during their career transition,” the company said. “All affected employees who are eligible will be provided with a formal 60-day notice, severance package, and re-employment services. We are committed to navigating this time with respect and full support for those affected.”
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Nationwide’s announcement comes as insurers, particularly in the property and casualty business, across the country have been cutting jobs.
The sector will cut at least 6,800 jobs by 2023, according to an analysis by S&P Global Market Intelligence. About 20 operators cut jobs last year.
Liberty Mutual and Grange cut jobs in Columbus last year.
The cuts come as drivers and homeowners are paying for soaring inflation in coverage costs that insurers attribute to distracted driving and higher auto repair costs. The cost of insuring a car has jumped 19.5% in the past year, more than any other category, according to federal inflation data.
Like other insurance companies, Nationwide is also burdened with high claims costs due to natural disasters that have caused the insurance company to withdraw from several areas of the country.
Nationwide has also hit pet owners with sharp increases in insurance rates and is stopping coverage for about 100,000 pets nationwide, blaming the rising cost of pet care and other factors that it says threaten the long-term viability and profitability of its pet insurance business.
Even with that, Nationwide reported record revenue in 2023 of $60.3 billion.
mawilliams@dispatch.com
@BizMarkWilliams
