Met Life to cut almost 2,000 jobs by year's end No. 2 U.S. life insurer may sell shares to public

Insurance

September 09, 1998|By BLOOMBERG NEWS

NEW YORK -- Metropolitan Life Insurance Co., the second-largest U.S. life insurer, plans to slash costs by eliminating 10 percent of its non-sales work force -- almost 2,000 jobs -- by the end of this year.

New York-based Met Life, which is considering a shift to a shareholder-owned company from a mutual company owned by policyholders, has about 42,000 employees worldwide. The U.S.-based non-sales, or administrative work force, now has about 19,500 workers.

The company said some cuts will come as employees quit or retire, and it doesn't know how many workers will be fired. Met Life said it plans further "productivity gains" next year, when it will consider more job cuts and other ways to reduce expenses.

"There is intense competitive pressure on companies to lower the cost of doing business," Lisa M. Weber, Met Life's senior vice president for human resources, said in a statement.

Met Life last month hired Goldman, Sachs & Co. and Credit Suisse First Boston to advise it on how best to sell stock to the public.

The mutual insurance company is one of many large insurers exploring or making such a move in the hopes of competing better with other financial services companies that are growing rapidly by buying other firms.

Mutual insurers, which have no stock, have to use cash for acquisitions, putting them at a disadvantage against publicly traded firms that can use both cash and shares. Stock companies can also pay their executives with stock options, something not available to mutual companies.

Met Life said it is still studying the conversion to a shareholder owned company, and hasn't made any decisions yet. A spokesman said the decision to cut jobs was independent of its possible conversion.

Met Life said job cut details haven't been ironed out yet. The company hasn't targeted any specific offices for cuts.

"We're just at the beginning of the process," said spokesman Kevin Foley.

The job cut plan follows the company's agreement in March to sell its Canadian unit to Mutual Life Co. of Canada for about C $1.2 billion ($789 million.) That sale allowed Met Life to shed about 3,000 sales and administrative staff.

Pub Date: 9/09/98

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