GEICO Layoffs 2024 – Discontinued News

Geico Corp. is a property and casualty (P&C) giant. It announced layoffs in October 2023 that would affect approximately 2,000 employees. “Geico’s layoffs will better position the company for long-term success,” said CEO Todd Combs in a letter to staff.

According to research, P&C carriers will account for most GEICO Layoffs layoffs in the US insurance market in 2023, with the sector losing at least 6,800 jobs. Approximately 20 different businesses reduced employees throughout the year. The insurers sought to refocus their operations or slow cash burn.

Geico decreased its workforce by 20% in 2023, losing more than a percentage of market share. It was due to the auto insurer seeking to restructure and regain profitability. There were no layoffs reported at Geico in 2024.

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About the company

Government Employees Insurance Company (GEICO) is an American auto insurance provider. Geico was founded in 1936 by Leo and Lillian Goodwin. The company claims that it was started during the Great Depression. The company employs about 38,000 people and is regarded as the third-largest private passenger auto insurer in the United States. Thus, GEICO Insurance, located in east Macon, is one of Bibb County’s largest employers.

In October 2023, GEICO mandated that employees return to their offices on particular days. In recent months, many employees have worked partially or fully remotely. In addition, the insurance firm said that it would lay off 2,000 employees, or 6% of its workforce.

Car insurers face difficulties

The competition between some of the leading businesses in the auto insurance sector has recently taken on a new dimension. The gem of Berkshire Hathaway’s large insurance business is Geico. It was once among the most prominent companies with the most significant growth rate but has declined over the last two years. Progressive, its biggest rival, has been growing financially and has seen an increase in its stock price.

Berkshire Hathaway’s annual report was released in late February. The report includes the number of employees in its dozens of companies. According to analyst James Shanahan, Geico’s headcount dropped 20% to 30,584 in 2023 from 38,285 in 2022, after a 6% drop in 2022.

Todd Combs took over as CEO four years ago. Since then, Geico has been working to catch up with the rest of the industry regarding technology. Combs, a favorite of CEO Warren Buffett, also manages a small portion of Berkshire’s $370 billion investment portfolio.

Ajit Jain, the head of Berkshire’s insurance unit, recognized the issues at the conglomerate’s annual meeting in May. He stated,

“Geico’s technology requires more effort than I thought it did. Geico has more than 600 legacy systems that rarely speak to each other. Geico is working to limit that to 15 or 16 systems.”

Buffett’s lack of investment in technology led to the tangle. It appears to have been an unusual, unforced error.

Like the auto insurance sector, Geico saw a significant increase in claims expenses in 2022. It responded by hiking rates by an average of 17% per policy in 2023. This rise is combined with a significant reduction in costs, especially advertising. These helped Geico restore its profitability in 2023.

Last year, Geico made $3.6 billion in underwriting profits, compared to a $1.9 billion loss in 2022. However, the higher profit came at a cost. Geico lost its most significant market share among the top ten auto insurance companies in the United States. It has disposed of unprofitable ventures.

Geico layoffs employees

GEICO Layoffs

Geico reduced its workforce by 20% in 2023, losing more than a percentage point in market share. The company has made some business changes and encouraged remote workers to return to the office.

According to reports, Todd Combs, the company’s CEO, emailed employees early on October 19, 2023 (Thursday).

In the email, Combs stated that the decision aimed to “better position” Geico. It was “for long-term profitability and growth.” Also, it was taken “after a thorough evaluation of all lines of operations.” Combs announced that the company would be “reducing” the number of employees.

According to Insurance Business, staff not affected by the layoffs received notice that they would be expected to work more days in the office. Geico was expected to entirely execute the return-to-work policy by January 1, 2024. By Thursday afternoon, Geico did not appear to have publicly announced the changes.

Combs stated in the email to employees, 

“We believe that being in the same place can promote a sense of connection and community. That time spent together will allow us to build bonds that create trust and increase our sense of connection.”

Reddit users who are current or former Geico employees reacted to a thread regarding layoffs within hours of the news.

In the forum, users discussed being laid off after decades with the company. Others are asking whether the return-to-office policy announced by Combs following the layoff news could restore trust.

Conclusion 

GEICO CEO Combs stated that the company will provide career transition help to employees affected by layoffs. Those affected will continue to have access to the insurer’s Workday platform, allowing them to apply for open positions at the insurance company. Combs also stated that existing benefits will continue to be granted during notice periods.

“This tough decision was not taken lightly,” Combs stated. “We realize we’re saying goodbye to dear colleagues and friends. As a leadership team, we are dedicated to helping those affected in the days ahead.”

The insurance firm has also closed its California agent offices and laid off employees across departments in recent years.

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