Sun Life’s new CEO planning 800 layoffs
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Hey there, time traveller!
This article was published 13/12/2011 (5017 days ago), so information in it may no longer be current.
TORONTO — The new leader of Sun Life Financial Inc. (TSX:SLF) is making some major changes just weeks after stepping into his role, including an exit from insurance products that caused it to suffer a deep financial loss, and laying off 800 employees, mostly in the United States.
Chief executive Dean Connor said Monday that Canada’s third-biggest insurer plans to discontinue selling variable annuity and individual life policies in the U.S. starting Dec. 30. The layoffs will be related to those businesses.
The decision came after Connor began a strategic review of the insurer’s business last summer, shortly after it was announced he would take the reins.
“Our main focus for the last four or five months has been our strategy and the path going forward,” Connor said.
Sun Life said the move will not affect existing policyholders and is not expected to have a material impact on its 2012 operating net income.
The insurer will book a one-time, before tax charge of between $75 million and $100 million, some of which will be accounted for in the fourth quarter of 2011 and the rest in 2012.
Shares of the company were 52 cents higher in late-morning trading at $18.84 on the Toronto Stock Exchange.
One attraction of variable annuity products is they offer a minimum rate of return guaranteed, which can cost the insurer when markets underperform.
The combination of a market downturn with a substantial increase in the amount of capital required by regulators has made variable annuities less attractive, Connor said.
Sun Life employs about 16,000 people, including 7,000 in Canada, and has insurance, wealth-management and mutual-fund operations around the world.
— The Canadian Press