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MetLife To Cut 1,900 Jobs

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NU Online News Service, Oct. 22, 5:18 p.m. – MetLife Inc., New York, says it plans to cut at least 1,900 jobs and take at least $368 million in charges in an effort to cut costs and improve its operations, but it says the Sept. 11 attacks will cost it somewhat less in the third quarter than it had previously estimated.

The major operating changes announced include:

Cutting 253 jobs at the officer and director level, or about 10% of all jobs at that level. (MetLife says 158 officers and directors left the company during the third quarter.)

Cutting 640 non-sales jobs in the individual business unit and 340 operations and technology jobs that support the individual business unit.

Cutting 450 jobs by discontinuing stand-alone 401(k) recordkeeping services. (MetLife will refer its 26 401(k) recordkeeping clients to Hewitt Associates L.L.C., Lincolnshire, Ill.)

Discontinuing the externally managed, guaranteed index separate accounts now available through pension unit.

MetLife says it will also cut 200 property-casualty jobs and take a policyholder liability. Taking the policyholder liability will involve giving back some accumulated surplus in group annuity contracts acquired when MetLife bought New England Mutual Life Insurance Company back in 1996.

The return of group annuity surplus will cost the company $12 million after taxes for the third quarter, and $356 million after taxes for the fourth quarter, the company says.

Although giving back the annuity surplus will lead to big charges for the third and quarter quarters, it should increase 2002 operating earnings by $100 million, and help make up for the effects of the weak stock market and increases in the cost of MetLife’s own pension plans, MetLife says.

In related news, MetLife predicted the Sept. 11 attacks will cost it less than it projected Sept. 14, when it gave a claims estimate of $250 million to $300 million.

The company now expects the third-quarter claims to total $210 million.

The claims will eat up about half of third-quarter operating earnings, but third-quarter operating earnings should still be at least 29 cents per share, MetLife says.


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