110 lose their jobs at USF&G Information services is restructured

January 22, 1993|By David Conn | David Conn,Staff Writer

USF&G Corp. laid off 110 of the 680 employees in the company's information services department yesterday as part of what executives said was a new strategy to provide better internal services to the insurer's various product divisions.

The layoffs followed two years of cost-cutting and staff reductions at the Baltimore-based insurance company. Those moves shrank the work force by more than 40 percent, to its current level of about 7,200 nationwide (2,273 in Baltimore).

But unlike the previous rounds of layoffs, the company said, yesterday's reductions were not intended merely to cut costs, but to make the information services department more effective.

The restructuring of the department "we hope will take us forward and help us to meet the needs of the various business lines," said USF&G spokeswoman Kerrie Burch-DeLuca. "We believe this is going to get us to where we want to be, but that doesn't mean there won't be any more reductions."

The laid-off employees, who all work at the company's Mount Washington center, were told of the terminations in meetings yesterday morning with their managers. They received severance packages of two weeks' pay for every year with the company and were told of meetings with outplacement counselors.

A private security force was on hand at the center as employees were given the news of who would stay and who would go.

Some employees said several security measures were in place, including new identification card readers.

By noon, several dozen current -- and now ex-employees -- had gathered at Gator's Pub in nearby Govans for what resembled a high-spirited wake.

Easing their sorrows in pizza, beer and other beverages, the bitter and bemused workers commiserated over having been "RIF'ed," an acronym for reduction in force that USF&G has used to describe the layoffs.

"They say it was a reduction in force, although they're currently using headhunters to find our replacements," said Joe Fajkowski, a computer operator in data processing.

But Ms. Burch-DeLuca said the company planned to hire only one senior level technician this year. While "there may be an attempt to fill skill gaps," she said, they won't be for any of the positions cut yesterday.

"I feel relieved in one way," Mr. Fajkowski added, "because the people who are there are going to have to do a lot more work, and we were working 60 hours a week before."

Several of the employees gathered at Gator's survived the cuts, but said they resigned anyway to take better paying-jobs they had found elsewhere. And at least one showed up to celebrate.

"I got a new job as of Tuesday," said Dan McKee. "I got a $3,000 raise and got a severance package from USF&G, and I'm headin' for Florida."

USF&G earned about $15 million in the first three quarters of 1992, before paying preferred stock dividends. The company lost $213 million in 1991 and $585 million the year before.

USF&G's stock closed at $13.125 a share yesterday, up 12.5 cents in New York Stock Exchange trading.

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