Allstate To Cut Around 3,800 Job; Sees Charges, Low Interest Rates To Impact Q3 Earnings

(RTTNews) - Insurance company Allstate Corp. (ALL) announced that it will cut approximately 3,800 employees under its restructuring plan as part of multi-year Transformative Growth Plan.

Further, the company projects that restructuring charges and other items will reduce third-quarter net income and adjusted net income. The company also projects that interest rates will remain low, which will also impact third quarter earnings.

The restructuring actions would result in pre-tax restructuring charge totaling approximately $290 million. In this, around $210 million to $220 million will be recognized during the third quarter of 2020, $50 million to $60 million in the fourth quarter of 2020 and any remaining charges in the first half of 2021.

The company sees the charges would reduce pre-tax net income by approximately $450 million to $550 million, and pre-tax adjusted net income by approximately $240 million to $280 million.

According to the firm, the goal of the Transformative Growth Plan is to increase personal property-liability market share by expanding customer access, improving customer value and investing in marketing and technology.

The planned job cuts will impact employees primarily in claims, sales, service and support functions.