The job cuts, which will impact back-office employees and not those who interact with customers, will take effect later this month. The company employs approximately 4,500 people, 2,000 in its Madison, Wis., office.

Post said the layoffs are the first that the firm has had since four years ago, when it cut the number of call centers from 37 to three.

Earlier this year, the company reported a net income loss of $149 million for 2008. The company attributed the setback to investment losses. On Dec. 31, 2008, CUNA Mutual had $1.3 billion invested in cash, Treasuries and agency-backed securities, representing 18% of its portfolio. The overall quality of the portfolio remains at an A+ rating level, CUNA Mutual said.

The $149 million 2008 loss comes after a $184 million gain the insurer posted in 2007 and a $186 million gain in 2006. Total assets declined by 13% in 2008, from $15.2 billion to $13.2 billion.

Post said the company is reviewing expenses and has solicited input from employees, and so far it has received more than 1,000 expense-saving suggestions.

He said that even though furloughs would be less painful than layoffs, the nature of the challenges faced prompted the cuts.

Furloughs assume that a business will pick up to where it was, and, therefore, management seeks to keep the business generally the same, he explained. The current situation is forcing the company to take steps to right-size the organization, he added.

CUNA Mutual announced its job cuts two days after CUNA revealed plans to require all employees to take five days off without pay this summer and to lay off more people in addition to the eight jobs eliminated earlier this year. CUNA, which has 260 full-time-equivalent employees, hasn't said how many employees will be let go or when the layoffs will take effect.

The problems of CUNA Mutual and CUNA are symptomatic of the nation's broader economic woes. The Labor Department recently reported that the unemployment rate in May was 9.4%, the highest since 1983. The nation lost 345,000 nonfarm jobs last month and has shed 7 million jobs since the current recession started in December 2007. Last month's job loss was about half the average monthly decline for the last six months.

CUNA Mutual did receive a bit of good news recently. Last month, a federal jury in Wisconsin ruled that the government can't levy the unrelated business income tax on state-chartered credit unions when they sell certain insurance products-credit life insurance, credit disability insurance and guaranteed auto protection insurance-all of which CUNA Mutual sells. The lawsuit, which was filed by Community First Credit Union, was decided last month. A similar suit, filed by Belco Credit Union of Greenwood, Colo., is pending in U.S. District Court in Denver.

Since taking the helm of CUNA Mutual in January 2005, after almost three years as president/CEO of Fireman's Fund, Post has put a strong emphasis on improving customer service and offering products that help credit unions attract new and younger members.

The company recently launched a pilot student loan program with 40 credit unions. When students apply, CUNA Mutual's lending partner takes the information and recommends credit unions for them to join and then offers a discount if the student joins one of the credit unions.

Credit unions can take the information and market other products to the student as can CUNA Mutual, which also began offering crop insurance for rural credit unions to sell.

Post said the company's broad product line will help it be well-positioned to take advantage of improvements in the economy.

"We'll come out of this as a strong financial services organization and see lots of opportunities ahead," he said. "The steps we have taken will help us better take advantage of things."
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