NEW YORK (AP) — Farmers Insurance said Monday it will lay off 11% of its workforce — about 2,400 employees — as part of a corporate restructuring aimed at increasing its efficiency and long-term profitability.
The California-based insurer said the job cuts will impact all lines of its business. Monday was the last working day at the company for most employees impacted by the layoffs, Farmers confirmed to The Associated Press.
In a statement announcing the job cuts, Raul Vargas, president and CEO of Farmers Group Inc., a subsidiary of Swiss giant Zurich Insurance Group, alluded to “existing conditions” in the insurance industry.
“As our industry continues to face macroeconomic challenges, we must carefully manage risk and prudently align our costs with our strategic plans for sustainable profitability,” Vargas said. “Our leaner structure will make us more nimble and better able to pursue opportunities for growth and ultimately make Farmers more responsive to the needs of our insured customers and agents.”
In recent months, Farmers — along with other insurers including Allstate and State Farm — have pulled back on property insurance in states like Florida and California. As these regions become increasingly susceptible to natural disasters, from hurricanes to wildfires, in the era of climate change, the insurers have cited the need to reduce risk exposure and operating costs — but critics have accused the companies of exacerbating the cost-of-living crisis.