NU Online News Service, Dec. 20, 2:23 p.m. – The Phoenix Companies Inc., Hartford, intends to cut $30 million in annual expenses by eliminating about 5% of its 2,200 jobs and focusing more tightly on domestic wealth management.
Phoenix, which converted to a shareholder-owned stock company from a mutual insurer in June 2001, will try to get $5.8 million of the annual expense savings by “adjusting the size of its distribution force in annuities and investment management to reflect the current market environment.”
Phoenix will also be shutting some international operations, restructuring its computer operations, selling an offsite meeting facility and working to tie employee compensation more closely to individual employees’ performance.
Phoenix says it will be announcing more expense reductions in January, and it notes that the new reductions come on top of $29 million in cuts announced earlier in the year. But it warns that it will have to spend $14 million more this year than it originally had hoped on defined-benefit pension expenses because of the recent weakness in earnings on its own pension plan investments.
The company also reports that it has raised $150 million by selling equity units. The sale brought in $20 million more than Phoenix had originally predicted. Phoenix will use $125 million of the cash to pay down bank debt and the rest for general corporate purposes.