Usf&g Eliminates 900 Jobs

January 16, 1991|By Ross Hetrick | Ross Hetrick,Evening Sun Staff Reporters Liz Atwood and Meredith Schlow contributed to this story.

USF&G Corp., the insurance giant, today eliminated 900 jobs -- 8 percent of its work force -- including 360 at its Baltimore operations.

The terminations, which were effective immediately, affect all levels of the corporation, and further reductions are expected, the company said. "It goes from vice presidents to clerical workers," said USF&G spokeswoman Kerrie Burch-DeLuca.

The company also said it has cut $28 million in advertising and promotion funds, frozen salaries, put its corporate jet up for sale and eliminated the home-office executive dining room.

USF&G had 11,800 employees nationwide, with 2,300 in the Baltimore area.

The company's principal subsidiary is United States Fidelity and Guaranty Co., a major writer of casualty and life insurance.

The terminated workers in Baltimore worked both at the company's landmark tower headquarters at 100 Light Street and at its Mount Washington complex in northern Baltimore. Burch-DeLuca did not know how many workers were affected at each location.

Supervisors held meetings this morning with small groups of workers to give them the news, according to USF&G employees. Other employees said they were contacted earlier.

Laid-off employees left immediately after getting the news, though they were given the opportunity to clean out their desks if they wished, Burch-DeLuca said.

"It is always expected to ask the employee to leave because their job has ended," Burch-DeLuca said. "We are trying to be as sensitive as we possibly can."

Supervisors stood watch while employees cleaned out their desks. Laid-off workers were offered boxes to carry their belongings. They also had to sign office removal forms verifying that they were taking only personal property and were escorted to the building's entrance.

The company had taxi cabs waiting to take home people who had car-pooled or didn't have cars, Burch-DeLuca said.

"I thought this was going to be a stable company. Now I've got to start all over again," said Tony Hawthorne, 29, who had worked six months in the USF&G purchasing department downtown.

Hawthorne said workers were not entirely surprised at the layoffs, although he said he expected the company to offer early retirement plans before it began laying workers off involuntarily.

Denise Sipe, 34, another purchasing department employee who lost her job, said a friend at the company warned her Tuesday that the layoffs were coming.

"I didn't want to go to work today," Sipe said. "And it's such a dismal day to go along with it." Sipe stood outside the headquarters with a small box of her belongings waiting to go to the bank to cash her severence-pay check.

Sipe, who has three children, said her husband also recently lost his job. She said she would apply for unemployment benefits and begin looking for work with other insurance companies .

The terminated employees will be given "generous" severance payments and help in finding other jobs, Burch-DeLuca said. But she declined to say how much the severance packages would be.

Terminated workers said severance payments were two weeks of pay for every full year of work, plus eight weeks of pay, regardless of service.

While one employee said the severance package was fair, she wondered about the company's cost-cutting measures.

"They spend so much on the executives and the fluff and the grounds -- they're ripping up flowers and planting new ones every other day -- it's hard to believe they couldn't have come up with money any other way."

A letter included in employees' severance packages contained information on two job-hunting workshops that will be held at Cross Keys Inn by Drake Beam Morin Inc., a national career management consulting organization based in New York.

In a letter to employees, Norman P. Blake Jr., chairman, president and chief executive officer of the company said: "Although our strategic plan has not been completed, one fact has emerged. We are not competitive because expenses are too high."

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