Zurich Insurance boosts layoffs after profit drop
Zurich Insurance is planning to cut 8,000 jobs worldwide between now and 2018, including 750 positions in Switzerland, after announcing a drop in profits for 2015.
The company on Thursday said net income for the year fell to $1.8 billion, down 53 percent from 2014 as business turnover dipped nine percent to $67.9 billion.
“This is a disappointing result, reflecting the previously announced challenges in our general insurance business and restructuring charges, and we have taken rigorous actions to improve profitability,” interim CEO Tom de Swaan said in a statement.
He said it was unlikely the insurer would meet profit targets for 2016 although it was on track to meet other targets.
Switzerland's largest insurance provider had previously announced job cuts to reduce expenditures but the “efficiency program” is now being accelerated, De Swaan said.
Instead of the $300 million in annual savings the company now expects to achieve group-wide savings of $1 billion by the end of 2018.
The 8,000 job cuts include layoffs previously announced, it said.
De Swaan said Zurich was also exiting "underperforming markets" and generally simplifying the company's business.
Investors responded negatively to the company's financial report, with the insurer's shares down almost four percent in morning stock market trading.
De Swaan took over the helm of the company after Martin Senn abruptly resigned as CEO in December, a month after the company announced that profits would be sharply reduced due to an industrial disaster in China.
In September, Zurich had warned that it faced significant losses after massive explosions at a hazardous goods storage firm in Tianjin, northeastern China, killed 161 people on August 12th.