Lincoln National Cutting 5% of Its Work Force

 

Saturday, Mar 07,2009, 2:35:32 PM   Click:

Lincoln National Cutting 5% of Its Work Force Fran Lysiak
U.S. life insurer Lincoln National Corp. is eliminating about 540 jobs, or about 5% of it work force.

"The difficult economic environment is continuing to put pressure on the financial sector, including Lincoln," said Laurel O'Brien, a spokeswoman for the company. The Philadelphia-based Lincoln National (NYSE: LNC) had 10,870 employees as of Dec. 31, 2007, she said.

The affected employees are being notified this week and the cuts will be completed in two months, O'Brien said. The cuts are "enterprise-wide," including Lincoln's operations in the United Kingdom, she said. O'Brien declined to say which business units or departments are affected.

Employees are being offered severance based on years of service and outplacement counseling, O'Brien said. The cuts include some reductions announced last month at a subsidiary company, she said.

Lincoln joins other U.S. life insurers, including Hartford Financial Services Group Inc. (NYSE: HIG) and life and mortgage insurer Genworth Financial Inc. (NYSE: GNW), in announcing layoffs. Since the meltdown in the subprime mortgage market in the United States, many companies have posted lower quarterly profits or even losses on millions in credit-related losses and write-downs of assets amid declining and volatile stock markets.

In the third quarter, Lincoln National's net income declined 55% to $148 million as it got hit with $167 million in net realized investment losses and derivatives, after deferred acquisition costs and taxes, and including the results of its variable annuity hedging program. It's scheduled to report fourth-quarter earnings on Feb. 9.

In November, a week after posting a $2.6 billion third-quarter loss, Hartford Financial said it was laying off nearly 2% of its total work force. It was to lay off about 500 of its 31,000 employees by the end of last year (BestWire, Nov. 4, 2008).

Soon after, Genworth Financial said it was slashing about 1,000 jobs worldwide, or 14% of the work force (BestWire, Dec. 19, 2008).

Lincoln National Life Insurance Co. currently has a Best's Financial Strength Rating of A+ (Superior).

On the morning of Jan. 29, Lincoln National's stock was trading at $17.55 a share, down 14.97% from the previous close.

(By Fran Matso Lysiak, senior associate editor, BestWeek: fran.lysiak@ambest.com)

Copyright © 2009 A.M. Best Company, Inc. U.S. life insurer Lincoln National Corp. is eliminating about 540 jobs, or about 5% of it work force. "The difficult economic environment is continuing to put pressure on the financial sector, including Lincoln," said Laurel O'Brien, a spokeswoman for the company.