Prudential Financial Inc. plans to cut 243 positions as it seeks to curb costs — the latest step in the life insurer’s years-long overhaul.
The company expects the effort to reduce the number of management layers by one-third, Chief Executive Officer Charlie Lowrey said in a memo to staff seen by Bloomberg. The cuts will impact different levels of senior vice presidents and vice presidents, Lowrey said.
“Unnecessary complexity slows us down and adds to our operating costs,” Lowrey said in the memo. “We have therefore embarked on a comprehensive effort to simplify our organizational design beginning with a significant reduction in the number of senior leaders.”
The insurer disclosed that 243 employees will be affected, according to a filing Prudential submitted to the state of New Jersey.
Prudential said the cuts, along with a “limited number of changes below these levels” will be announced in coming days, according to the memo.
The Newark, New Jersey-based company confirmed the contents of the memo.
Prudential unveiled a strategy at the beginning of 2021 meant to transform the firm through deals, cost savings and share buybacks. Lowrey has overseen moves away from market-sensitive businesses, including part of a variable annuities block the company has sold.
Read More: Prudential CEO Looks to Expand Abroad, in Asset Management
Prudential also reported third-quarter results on Wednesday, with profit of $3.44 a share that topped analyst estimates. Before adjustments, the company recorded a net loss of $2.49 billion, excluding taxes tied to investment losses, related charges and adjustments. Those losses were largely a function of the impact of higher rates, according to the statement.
Key Insights
- Prudential reported $10.1 billion of revenue, missing the $13 billion analysts expected
- “We continued to execute on our strategy to reduce market sensitivity and increase capital efficiency, enhance our capabilities to better serve customers, and optimize our operating model to drive sustainable growth,” Lowrey said in the statement
- PGIM’s adjusted operating income fell to $211 million from $219 million a year earlier, due to lower agency and seed and co-investment income as well as higher expenses
- Total assets under management at the unit dipped from the previous quarter to about $1.22 trillion on both institutional and retail outflows
- The US businesses segment reported adjusted operating income of almost $1.1 billion for the quarter, up from $615 million a year earlier. The company credited higher net investment spread results and lower expenses
- Net investment spread results also boosted income for the international businesses segment, which increased to $811 million from $748 million in the prior year