Thank you for sharing!

Your article was successfully shared with the contacts you provided.

MADISON, Wis. – It might be a rough holiday season for some CUNA Mutual employees. With a 2002 profit goal of $80 million, and forecasted profit of $55 million, CUNA Mutual is undergoing a series of cost-cutting moves to increase company profits. The company cited not only the 2002 profit gap, but also missing its 2001 financial projections, the events of Sept. 11, and a poor economy as reasons for reducing costs in many areas for the best interest of its policyholders. CUNA Mutual said it isn’t the only insurance company being hurt by the bad economy. “The downturn in the stock market has decreased assets and fees. As interest rates have declined, investment income has decreased. This has left insurance companies with less revenues to cover operating expenses,” said CUNA Mutual Spokesperson Syd Lindner. Lindner also cited weak consumer loan demand, increased pension expenses, higher healthcare expenses as well as higher reinsurance costs as hurting the company’s bottom line. CUNA Mutual said management is pursuing the following strategies to control costs: * Exploring, in detail, every possible way to reduce expenses; * Has had a “leadership must approve” hiring process in place this year; * Placed a freeze on external hires this fall; * Is reviewing all open positions to ensure effective staff redevelopment; * Is reviewing all open positions to ensure effective staff redeployment. Lindner said employee cuts of both non-represented and represented (approximately 1,600 CUNA Mutual employees are members of the Local 39 of the Office and Professional International Employees union) employees will be forthcoming. Immediate cost cutting moves include the following: *Canceling all company-sponsored holiday parties; *Eliminating food orders for meetings; *Reducing travel expenses; *Reduced spending on outside consultants, outside contractors and other fees; *Managers are also reviewing all spending categories for reduction (e.g.advertising, printing, etc.) Also, non-union represented employees will see big changes in their health plans. Effective Jan.1, they will be responsible for co-payments for prescription drugs, co-payments for office visits, and the current Preferred Hospital Plan will be replaced with a Preferred Provider Organization plan. Management is also considering other changes for non-union personnel, including a wage freeze for 2003, changes in vacation accrual, and elimination of the holiday bonus for the next two years. Most CUNA Mutual employees are non-union. The only union employees are the 1,600 out of the 2,000 that work in Madison. However, CUNA Mutual has 5,000 employees worldwide, so there are about 3,400 non-union employees. As for the coming layoffs, they will include both non-union and union employees, though at press time the final number was not yet determined. Interestingly, the company does plan on hiring new employees. In a plan to increase revenue, it will hire about 100 new reps next year in its MEMBERS Financial Services program. The MEMBERS Financial Services program is the old Plan America program where reps are on-site in credit unions selling investment and insurance products to members. In a statement CUNA Mutual said, “We are a strong company and our future outlook is positive. Will we make changes that make good financial sense? Absolutely. We must. This is part of our obligation to our policyholders, and it is part of our commitment to the future of the organization.” CUNA Mutual leaders and union leaders will meet daily to discuss the planned employee cuts. At the request of the union a task force was formed to address the situation. It consists of company executive leadership team members and union leadership. The two met three times last week to address the situation. At press time, the union did acknowledge that it was aware of the coming cuts, but a spokesperson was unavailable to speak on the record. [email protected]

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?


Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times
Live Chat

Copyright © 2022 ALM Media Properties, LLC. All Rights Reserved.