USF&G Cuts 900 Jobs; Says More Layoffs Pending
BALTIMORE (AP) _ Financially troubled USF&G Corp. laid off 900 employees Wednesday and company officials said they expected to eliminate more jobs as the insurance conglomerate battled to remain competitive.
Roughly 360 employees in the company’s Baltimore headquarters and 540 workers in branches and subsidiary branches in all 50 states were told they were out of work as of Wednesday morning, said company spokesman Kerrie Burch- DeLuca.
″It goes from vice presidents to clerical workers,″ Burch-DeLuca said.
USF&G, which had 12,600 U.S. employees at the end of 1989, expected the layoffs to cost $7 million in severance pay but to save $45 million in the long run.
In other cost-cutting measures, the company said it slashed $28 million in advertising and promotion budgets and froze salaries. It also put its corporate jet up for sale and eliminated the home-office executive dining room.
The diversified financial services company slashed its dividend and imposed $75 million in cost-cutting measures in November after losing $15 million in the third quarter of 1990.
″Although painful, downsizing our work force as part of a broad-based expense reduction program is absolutely essential to USF&G’s ability to compete successfully in the marketplace,″ Norman P. Blake Jr., company chairman, president and chief executive officer, said in a letter to employees.
Burch-DeLuca said laid-off employees left work immediately after getting the news. The company had taxi-cabs waiting to take home people who had car- pooled with employees who still had their jobs, she said.
Denise Sipe, 34, a purchasing department employee, said a friend warned her Tuesday the layoffs were coming. Sipe, who has three children, said her husband also just lost his job.
″I didn’t want to go to work today,″ she said, as she waited outside the company headquarters with a small box of her belongings.
Terminated workers said severance payments equaled two weeks of pay for every full year of work, plus eight weeks of pay, regardless of service.
USF&G, with assets of $13.9 billion, is engaged primarily in property and casualty and life insurance and the sale of financial services. Its main subsidiary is United States Fidelity and Guaranty Co.