Allstate Closing Orange Regional Office
Insurance: 600 jobs, three other facilities affected by shift that a spokesman calls
'operational, rather than financial.'
Allstate Corp., the second-largest
insurer of U.S. cars and homes, will eliminate four regional offices, including one in
Orange, in a move to streamline its sales operations and cut costs.
The insurer said it's paring the number of field offices to
13 from 17. About 150 people work in each of the offices, said Allstate spokesman Peter
Debreceny.
"About 600 people will be affected in one way or
another, but that doesn't mean we will be cutting 600 jobs," he said, adding that the
main reasons for the shift are "operational, rather than financial."
Allstate is the second insurance company in the last week to
announce plans to close an office in Orange County.
On Friday, Farmers Insurance Group said it will close its
Santa Ana-based administrative office and relocate about 180 employees to Simi Valley and
other Farmers offices in a move to cut costs. The building, at 2800 Farmers Drive, will be
sold.
Allstate said it also is closing regional offices in
Farmington, Conn.; Hudson, Ohio; and Kansas City, Kan.
Regional offices provide sales, underwriting and financial
administration services for Allstate's agents. Executives overseeing the offices will have
greater "accountability" as a result of the overhaul, Debreceny said.
The regional office restructuring is expected to be followed
by other changes to be determined by a review of core businesses. Allstate announced the
review late last month, when it warned earnings will miss estimates because of price
competition, Hurricane Floyd and other losses.
Steeper job cuts and other cost-saving steps are likely to
be among the results of Allstate's internal review, analysts said. Allstate said the
review will be completed by year-end.
"They have to shake things up," said Warburg
Dillon Read LLC's Michael A. Lewis. "Anything could probably help the stock, at this
point."
Shares of the company, based near Chicago in Northbrook,
Ill., dropped 50 cents to $23.75. |