The 900 jobs that were eliminated by USF&G Corp. in an initial round of cuts Wednesday fell primarily in the company's financial-services and life insurance businesses.
The move leaves the company's core property and casualty segment as the primary target when further changes come near the end of March, the company said yesterday.
With 360 of the layoffs coming in USF&G's home offices in Baltimore, roughly 40 percent of the total cuts were in the company's financial-services division, mostly in the company's branches and subsidiary offices outside of Maryland, said Kerrie Burch-DeLuca, a spokeswoman for the company.
The life insurance layoffs accounted for about 30 percent of the total and also were felt primarily outside of Maryland, she said.
In its announcement Wednesday, the Baltimore-based insurer said the cuts were part of an overall program aimed at reducing expenses and improving competitiveness that has been undertaken by the company's new chairman and chief executive, Norman P. Blake Jr.
The company said the moves were expected to save the company $42 million in expenses this year and would be the first of probably two cost-cutting and restructuring steps that Mr. Blake would implement. USF&G stock closed yesterday up 12.5 cents a share at $7.875 a share.
"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," Mr. Blake said in a prepared announcement Wednesday.
Before Wednesday's move, USF&G, one of the nation's largest insurance companies, had 11,800 employees, including 2,300 in its Baltimore offices.
Layoffs at the company's operations in Baltimore came in all departments and levels, "from vice presidents to the garage," Ms. Burch-DeLuca said.
USF&G, operating mostly through its largest subsidiary, United States Fidelity and Guaranty Co., lost $15 million during the third quarter, which ended Sept. 30.
Wednesday's layoffs came after more than a two-month review by an outside consulting firm of the company's life insurance operation, Ms. Burch-DeLuca said.
"I think they are pleased with the study and they are implementing those designs," she said. "These were the results of that."
Besides the layoffs, the main impact of Wednesday's announcement was felt in the life insurance division, which was the main segment to be "streamlined and refocused," said W. Minor Carter, senior vice president of the company.
Among the points outlined by Mr. Blake in a letter to brokers sent yesterday was that the company would continue selling annuities, universal life policies and "selected ordinary life products" but would "eliminate products that are expensive to administer or are otherwise unprofitable."
The company did not elaborate on which products Mr. Blake meant.
Ms. Burch-DeLuca said that no restructuring of the property and casualty insurance segment had yet been implemented because Mr. Blake had not concluded his review of that division. The review is expected to be completed near the end of the first quarter, at which time more job cuts are expected, the company has said.
In a daylong series of meetings yesterday with all Baltimore-based USF&G employees, Ms. Burch-DeLuca said that Mr. Blake wanted to make "clear that the reduction in force was absolutely necessary and taken after a great deal of thought."
But, she said, "I don't think the book is closed on anything, and I think that was the message that Mr. Blake had today."