"Given the existing conditions of the insurance industry and the impact they are having on our business, we need to take decisive actions today to better position Farmers for future success," said President and Chief Executive Officer of Farmers Group, Inc. Raul Vargas. "Decisions like these are never easy, and we are committed to doing our best to support those impacted by these changes in the days and weeks to come." Vargas further said that as the industry continues to face macroeconomic challenges, they are to carefully manage risk and prudently align their costs with their strategic plans for sustainable profitability.
"Our leaner structure will make us more nimble and better able to pursue opportunities for growth and ultimately make Farmers more responsive to the needs of our insured customers and agents. There is a bright future – for Farmers and for our industry – and it necessarily will look different than the past," Vargas claimed.
Moreover, earlier in the summer, the insurance provider decided to no longer do Farmers-branded auto, home, and umbrella policies in Florida. It also curbed some of its coverage in California. Meanwhile, for Florida, the company described the move at the time as one "necessary to effectively manage risk exposure."
The California-based insurance company, which was founded in 1928, provides over 19 million individual policies nationwide, according to its website. Those belong to some 10 million households.
One of the workers affected by the mass firing said she had been notified following a brief video message from Vargas, wherein the head announced the reorganization and resulting terminations.
The former employee told 13 On Your Side via Zoom on Tuesday that the email she received included information regarding a severance package. She claimed she and her co-workers had not been allowed to finish their shifts. For her what the company did was "ruthless," and couldn't have been less personal or come at a worse time. "I thought it was insane, that they're just dropping all of us," they related. "We have kids… school just started. It seemed like a really inhumane thing to do to just say, hey, you're terminated and it just is so random. We were just easily thrown away and it was not personal at all."
Another one, who requested anonymity, also told the news outlet that she had also been terminated Monday, suggesting the insurance group "couldn't have handled it worse." "We were all waiting in a panic. Then… the first wave of emails came out. These were the 'safe' emails. My husband got one, and I hadn't received my email yet. A few moments later I got the email."
Below is a transcription of the email she said they received from corporate leadership:
"As shared earlier today in our town hall, current industry and economic trends have negatively impacted our performance, and unfortunately, we have to take difficult but necessary steps to reduce our costs and better position the organization for future success. This was not an easy decision, but it is crucial to a future of long-term profitability and growth. I regret to inform you that your employment has been impacted. I know you likely have many questions, and we'd like to provide support and information to you in a variety of ways."
A third employee claimed that their access to the Farmers system had been revoked so rapidly they had been unable to utilize the resources to which the email had alluded. (Related: Tech companies laid off nearly 221,000 workers in 2023 – already way ahead of last year's total.)
Meanwhile, a Farmers' spokesperson refused to answer questions concerning how many employees had been terminated from Grand Rapids-area locations. But he/she responded with a part of the press release they sent out citing austerity measures and long-term profitability by streamlining their workforce as the reason for the mass termination. It also indicated the promise to support those impacted by the changes.
"'Farmers Insurance' and 'Farmers' are tradenames for a group of insurers providing insurance for automobiles, homes, and small businesses, and a wide range of other insurance and financial services products. Farmers Insurance Exchange, the largest of the three primary insurers that make up Farmers Insurance, is recognized as one of the largest U.S. companies on the 2023 Fortune 500 list," the official website included.
Read more about the collapsing American economy at EconomicRiot.com.