Tough times for insurers prompt GEICO to cut 6% of workforce
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Todd Combs, the CEO of Berkshire Hathaway subsidiary GEICO, (and one of Berkshire two investment managers), has told employees the insurer is “reducing our workforce by roughly 2,000 associates, or 6% of our total workforce.”
In an internal letter sent Thursday morning that was provided to me by a company spokesman, Combs said the reductions will “allow us to become more dynamic, agile, and streamline our processes while still serving customers.”
He cited a “very difficult period across the industry” with high inflation, longer repair times due to shortages of parts and labor, and rising medical costs all making claims more expensive.
According to the Insurance Journal, several other insurers, including American Family Insurance and Farmers Insurance have already made similar moves.
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People pose with GEICO’s ‘gecko’ during Berkshire’s annual meeting in Omaha, May 5, 2023. REUTERS/Rachel Mummey
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Combs also said the company will be requiring workers to spend more time in the office, with full implementation of the new policy by the beginning of the next year.
It appears GEICO won’t be mandating a full return. The letter says, “Managers will soon be sharing employees’ required number of in-office days.”
In addition, Combs admits GEICO’s management needs to do a better job of explaining the “why behind the decisions we are making,” calling better employee communications a “priority for our leaders.”
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