Great-West to cut 1,500 jobs, take charge amid restructuring plan
Great-West Lifeco Inc. is making sweeping changes to its Canadian business, cutting staff as it moves to reduce costs in an increasingly competitive industry.
The Winnipeg-based insurer plans to broadly reduce its Canadian head count by as much as 13 per cent, or 1,500 positions, in the next two years. It will also slim down its real-estate footprint and invest in some new technology systems. As a result of the restructuring, Great-West will take a charge of $215-million before tax in its second quarter of 2017.
The move comes as Great-West repositions its business to compete more aggressively in the Canadian insurance and wealth management marketplace, where older consumers are shifting towards retirement products from investments aimed at increasing their assets, while younger potential customers demand faster and more convenient digital service.
For subscribers: The insurance shift: How a staid industry is attempting to reform itself
At a time when Canadians have more choice than ever in how, where and when to seek advice and buy financial products, insurance companies including Great-West are revamping their offerings and distribution methods to court these choosy buyers.
“While there’s always excitement in investing and developing new capabilities, there’s also the difficult step of reducing costs to ensure we remain competitive,” said Paul Mahon, CEO of Great-West Lifeco, adding that management has a duty to “make sure that our businesses are relevant and strong in a market that’s changing dramatically and dynamically with technology.”
Mr. Mahon said that the staffing cuts will come from across the organization over the next two years, and that the company has tried to give advanced warning to affected departments, which include the company’s temporary work force. Efforts will be made to move some staff into jobs in other parts of the company, while others will receive early-retirement packages.
As a result of making these changes, Great-West expects to generate continuing pretax savings of about $200-million by the end of its first quarter in 2019.
Mr. Mahon said that although consumers have heightened expectations for digital services from financial companies, they are not willing to pay for upgraded systems, he says. In most cases, they expect to pay less.
source
Great-West Lifeco Inc. is making sweeping changes to its Canadian business, cutting staff as it moves to reduce costs in an increasingly competitive industry.
The Winnipeg-based insurer plans to broadly reduce its Canadian head count by as much as 13 per cent, or 1,500 positions, in the next two years. It will also slim down its real-estate footprint and invest in some new technology systems. As a result of the restructuring, Great-West will take a charge of $215-million before tax in its second quarter of 2017.
The move comes as Great-West repositions its business to compete more aggressively in the Canadian insurance and wealth management marketplace, where older consumers are shifting towards retirement products from investments aimed at increasing their assets, while younger potential customers demand faster and more convenient digital service.
For subscribers: The insurance shift: How a staid industry is attempting to reform itself
At a time when Canadians have more choice than ever in how, where and when to seek advice and buy financial products, insurance companies including Great-West are revamping their offerings and distribution methods to court these choosy buyers.
“While there’s always excitement in investing and developing new capabilities, there’s also the difficult step of reducing costs to ensure we remain competitive,” said Paul Mahon, CEO of Great-West Lifeco, adding that management has a duty to “make sure that our businesses are relevant and strong in a market that’s changing dramatically and dynamically with technology.”
Mr. Mahon said that the staffing cuts will come from across the organization over the next two years, and that the company has tried to give advanced warning to affected departments, which include the company’s temporary work force. Efforts will be made to move some staff into jobs in other parts of the company, while others will receive early-retirement packages.
As a result of making these changes, Great-West expects to generate continuing pretax savings of about $200-million by the end of its first quarter in 2019.
Mr. Mahon said that although consumers have heightened expectations for digital services from financial companies, they are not willing to pay for upgraded systems, he says. In most cases, they expect to pay less.
source