Genworth Financial Inc (NYSE:GNW) has announced that it plans to cut 400 jobs in an effort to cut its costs. That’s according to a report from Saabira Chaudhuri which was posted on The Wall Street Journal website.
Details On The Job Cuts At Genworth Financial
Of the 400 jobs Genworth Financial Inc (NYSE:GNW) said it will cut, 150 of them are positions that are already open and that simply won’t be filled. The insurer’s management said those cuts will reduce related program and information technology spending. FactSet indicates that Genworth Financial Inc (NYSE:GNW) has approximately 6,300 employees currently.
Genworth Financial said after the cuts are completely implemented, it will have yearly pretax savings of between $80 million and $90 million. The insurance provider will have to take a $15 million to $20 million pretax non-operating charge in the second quarter of the year in connection with these job cuts. The charge will include expenses related to outplacement, severance and other related expenses.
Genworth Financial’s Near-Term Expectations
The company doesn’t believe the job cuts will significantly impact the guidance it has already provided for this year, although it expects the cuts to have a meaningful effect in years to come.
In April, the company’s first-quarter earnings surged after its U.S. mortgage insurance unit reported its first profits in several quarters. Also the company said its operating profits rose at its life insurance businesses in the U.S.
Shareholders have been somewhat skeptical about the company’s near future because of the lack of profits from its mortgage-insurance business. However, the company has been assuring investors that it would be profitable again by the end of the year.
In March, The company announced that it would sell its wealth management business to Genstar Capital and Aquiline Capital. The price tag on that sale was $412.5 million, and it enabled Genworth Financial Inc (NYSE:GNW) to get rid of one of its noncore businesses.
As of this writing, shares of Genworth Financial were up 1.45 percent at the New York Stock Exchange.