‘Yet their prices keep going up’: Geico lays off 2,000 workers. So does Liberty Mutual. Why?
In a reflective TikTok video that has attracted nearly 300,000 views, Matthew Layson (@matthewlayson) sheds light on the recent streak of layoffs in the insurance industry.
His detailed analysis, titled "#geico #libertymutual #layoffs #insurance," begins with some startling statistics: "So, Geico laid off about 6% of their workforce, 2,000 people. Liberty Mutual just laid off about 2% of their workforce, 850 people. We've already talked about Farmers and their 11% layoff. What in the world is going on with the insurance industry?"
Layson doesn't shy away from criticizing the vague corporate public statements accompanying the layoffs, describing them as "corporate mumbo jumbo trying to position themselves to say that they're doing just fine, even though they clearly are having some struggles." He shares insights from current and former employees across various companies, revealing a common premonition of impending layoffs. "First a leader changes, then some benefits stop, and then suddenly there's a restructure," he explains, highlighting the warning signs employees he spoke to noticed.
The TikToker also points out the lack of consideration these corporations had for their employees. He recounts stories of abrupt dismissals and poorly informed decisions, such as restructuring business insurance professionals into personal insurance divisions without regard for the distinct skill sets required. He insinuates most of it is “corporate laziness.”
Layson also discusses the financial aspects driving these layoffs. He explains how insurance companies, buoyed by a booming market, became complacent and overstaffed. "A lot of insurance companies became a little bit lazy, overinflated, having jobs and roles that maybe they really didn't need," he observes. This over expansion, coupled with a need to cut costs, led to the unfortunate but seemingly necessary layoffs to reinforce the bottom-line.
@matthewlayson #geico #libertymutual #layoffs #insurance ♬ original sound - Matthew Layson
The analysis resonated with the TikTok community, and many commenters shared their thoughts and experiences in the comments. One user speculated, "Layoffs improve their stock price before releasing their numbers." Another user, who works in claims, expressed bafflement. "I am in claims and we are already stretched thin. It's an aging talent pool and it's hard to keep who we have. The layoffs baffle me," they wrote.
Layson's concluding remarks highlight an impending challenge for insurance agents, predicting more errors and difficulties due to the reshuffling of inexperienced staff. "We're gonna be interacting with people that don't know their jobs a lot more often," he warns, pointing to the industry's talent acquisition problem.
This video and the discussion it sparked on TikTok offer a candid look into the tumultuous state of the insurance industry, which has lately been marked by layoffs and strategic shifts. As Layson and the TikTok community suggest, these changes reflect broader economic trends and internal industry dynamics, impacting both employees and consumers alike.
Numerous outlets have written about layoffs affecting Geico, Farmers, and Liberty Mutual. Insurance Business America writes that in addition to Geico's layoffs, the company is prioritizing a "return to office" business model, which could be a consequence of the "strategic shifts" referred to by insurance consulting firm WaterStreet Company's CEO Gregg Barrett.
Repairer Driven News quoted Barrett as stating that there have been massive shifts in the insurance industry as of late: "Given the myriad challenges, many insurers find themselves at crossroads, leading to reorganizations and strategic shifts. Layoffs and structural changes become necessary evils to streamline operations and, in the longer run, aim for profitability."
Layoffs en masse haven't just affected the insurance business, however, but the tech sector as well. Major corporations like Google, Amazon, Meta, Microsoft and others have cut tens of thousands of jobs, leaving throngs of the once employed left dusting off their resumes and looking for work once again.
The Daily Dot reached out to Geico via email Layson via TikTok comment for further context.
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