MetLife is going to be cutting jobs. Central bank policies have strangled MetLife’s bond-dominated portfolio. It’s valued at $500 billion or more. Second quarter profits of a variable-annuity business — that the company is trying to exit — fell 90% to $110 million.
The exit is part of its move to unwind its retail operation.
MetLife CEO Steve Kandarian says the squeeze is forcing the company to reduce annual costs by $1 billion or more by the end of 2019. That means job cuts for a company that had 69,000 employees in December of last year.
“In light of the significant headwinds our industry is facing, MetLife must do even more to avoid simply running in place. We know this will require us to reduce headcount, which is never an easy step for an organization to take. Our overall goal is to be more efficient, so that we can better serve our customers and provide a fair return to shareholders,” Kandarian said.
As part of the cost-cutting process MetLife inked a deal with Computer Sciences Corporation to administer 7 million policies. Computer Sciences will provide a call center and information technology support. It will also offer jobs to 1,000 people currently working for MetLife in the United States and in India.
The company has been moving its retail operation to a new — and separate from MetLife — unit called Brighthouse Financial. At the same time, it was going to do share buybacks but that has been halted with no plan to resume.
“Our first order of business is to work on the separation and make sure we have a clear understanding about capitalization of Brighthouse, the form of the separation. Once we get through that, we’ll focus on the issue of how we’ll use any remaining excess capital. We’re not at that point yet where we can really speak to when share repurchases may begin,” Kandarian said.
Source link: Insurance Business America