Allstate, Lincoln To Cut Jobs

By Allison Bell

January 29, 2009 at 07:00 PM

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Two financial services companies have announced moves to reduce employee counts.

Allstate Corp., Northbrook, Ill., says it expects to eliminate about 1,000 positions at the Allstate Financial financial services unit over the next 2 years.

The unit now employs about 3,800 people.

Allstate Financial will try to cut some categories of operating costs by about 20%, or $80 million, starting in 2011, the company says.

The unit also will work to narrow the focus of product offerings and to move away from reliance on products, such as fixed annuities and institutional markets products, designed in such a way that performance depends heavily on investment spreads, Allstate says.

Allstate reported Thursday that it experienced a $1.1 billion in net losses in the fourth quarter of 2008 on $6.6 billion in revenue, compared with $760 million in net income on $9 billion in revenue in the fourth quarter of 2007.

Allstate Financial is reporting a $1 billion net loss on $1.6 billion in premiums and deposits, compared with $31 million in net income on $1.8 billion in premiums and deposits in the comparable period in 2007.

Allstate Financial operating income fell to $89 million, from $158 million.

Lincoln National Corp., Philadelphia, has announced that it is eliminating about 5% of its 10,800 positions, with the cuts affecting the entire company.

Some affected employees were notified in December 2008, and some were notified this week, a company representative says.

The laid-off employees will receive severance pay and outplacement help, the representative says.

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