Thread regarding State Farm Insurance layoffs

8 Reasons Things Went the Wrong Way at State Farm

The change started when the company went into banking.

It was obvious that insurance was not profitable enough to continue to be there primary focus. Loss prediction in the face on a changing environment became more difficult. Exposure loads due to density on homeowners in storm prone areas and regulations mounted up along with the high cost of class action suits.

The solution was a move toward banking and investment services while retaining insurance as a base. Outside consultants where brought in and a company that had been your good neighbor service centered organization with face to face contacts changed its focus to cost control. How do we provide service but reduce costs.

  1. The cost reduction focus was a needed change, but with it employees where treated more like depreciable assets then human beings.

  2. The family atmosphere was gone and along with it the face to face good neighbor service. Now it is a toll free number and a two to ten digit extension number.

  3. Seniority meant nothing.

  4. Employee morale hit the basement.

  5. Employees benefits where cut.

  6. Job descriptions were rewritten and long term employees where constantly put under pressure and told that they now had work quotas to meet and the focus became doing more with less.

  7. Job descriptions were rewritten changing salary ranges and bonuses were given instead of raises so there was no cumulative affect from year to year.

  8. Retirement plans where changed or done away with.

So here we are today…

Does State Farm still provide good service? Yes, based on the new definition of what service you expect.

Is it the same company it used to be, no!

Would I recommend working there? If you are looking for a career do not work in claims at State Farm.

This is a repost of a note written by Anon - see it here: @G2iNT6q-6Gfmp or www.thelayoff.com/t/ G2iNT6q

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Post ID: @OP+NcfuG7W

12 replies (most recent on top)

Hmmm-SF is a “for profit company” as you described it.

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Post ID: @x7bzt+NcfuG7W

Its easy to understand. They wanted to reduce costs, and determined its producing employees should be costs rather than family. This was a far easier pill for the executives to swallow than cutting out all the useless bureaucracy thats weighing the company down.

Also stop paying the CEO on par with other for profit fortune 50 companies. We are not that, in any way shape or form, and our leader shouldnt be able to profit like that.

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Post ID: @x7xdy+NcfuG7W

Thank you! As a State Farm employee I couldn't agree more. I don't think things will turn around at all so if you can, LEAVE!

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Post ID: @x6fhq+NcfuG7W

And the last post sums up my biggest regret about this whole thing. I should have taken one look at State Farm's retirement package 17 years ago and started planning then to find another job. I am in precisely the situation you mentioned -- will never get the full pension that allowed State Farm to short change employees on the 401k, and will never be able to make up for all those lost 401k contributions.

It's my fault for not getting out sooner.

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Post ID: @4vmsn+NcfuG7W

I would also disagree with the poster singing the praises of the 401K plan here. Our 401k match is PATHETIC. The 1100 dollar fixed annual match from the employer is ridiculously uncompetitive. For more highly paid associates, that is 1% or less.

Allstate pays 5% annual 401k match in addition to a no-cost cash balance pension plan.

USAA does not have a pension plan, but matches 8% in the employees 401K plan, annually, plus a discretionary bonus that puts another 3-9% into employee's 401k's annually.

Geico Matches up to 10% of employee's annual salary into 401k.

Your 401K is portable. You can take it with you wherever you go because it's yours. Our pension manacles you to this place - you can't afford to leave and have it stop growing. But what if leaving isn't your decision?

So now we have employees who may be 10 or 15 years from retirement and pension eligibility, who are staring down the barrel of layoffs. They will never be able to capitalize on the "awesome" pension that State Farm uses as an excuse to shortchange us on 401k matches. If vested, they will have to take a miniscule reduced benefit at age 63, not enough to live on.

They are literally out in the cold - not able to collect the pension they were promised, but they have given up 10-20 years of decent 401K matching as well by working here. And you can't get that time back.

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Post ID: @4vhgv+NcfuG7W

I'm not disputing anything in the OP, but how do we reconcile the focus on cost-cutting with the fact that 7 years ago or so, both the business and systems leadership decided to sink billions of dollars into a massive systems overhaul that made systems larger and more complex, instead of doing what had obviously needed to be done for decades (shrinking management, consolidating roles, etc.)

We were told that the impetus for this "investment" in systems was the financial crisis of 2008. The investment portfolio was suddenly very shaky, so our leaders yanked money out of the markets and sank it into one of the biggest boondoggles in modern IT history.

Sadly, the company would have been far better off if they had simply used all that money to start a bonfire.

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Post ID: @4vlzx+NcfuG7W

Our 401 is a 5 on a scale of 10. Our investors have done a mediocre job, at best. Seems to have changed within the last 7 years.

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Post ID: @4vhmk+NcfuG7W

As a 32 year employee you are correct on a few points. But let me correct you on #8. SF still has one of the best pension and 401K plans of the fortune 50 companies. The real changes started in P&C when they started restructuring in 1995.

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Post ID: @8xka+NcfuG7W

State Farm is not the company that it was 10 years ago, let alone 30 years ago.

Don't expect to move up the pay scale like the old days and don't expect to retire from there...

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Post ID: @3pac+NcfuG7W

Thanks, OP. Great post.

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Post ID: @jbj+NcfuG7W

so true, the company changed forever

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Post ID: @dmz+NcfuG7W

Good post. Thank you!

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Post ID: @dac+NcfuG7W

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