Colleagues,
I’m reaching out to you to share an important business update and the vision for GEICO’s future.
We have seen significant changes in our business in recent years and we have evolved our business practices to cope with a very difficult period in the industry. Inflation levels not seen in decades, parts delays or labor shortages extending the time to repair, rising medical costs and other factors have caused our loss costs and combined ratio to rise, along with the industry as a whole .
Despite these historic challenges, we have made great progress in returning GEICO to profitability and establishing a foundation for growth, while increasing our long-term flexibility and strength. GEICO remains in stable condition with a solid capital base and great institutional support, and we have a clear vision for our path forward.
We’ve invested in our infrastructure and internal systems to transform the way we deliver products to customers. We have made remarkable progress on many of our top initiatives that help create one of the best shopping experiences in our industry.
For our associates, we have significantly expanded merit pools over the past two cycles and increased salaries to provide greater compensation stability. We also established a performance culture recognition and launched our first 401(k) Match program.
But we still have more work to do. Our future requires our company to adapt quickly and evolve our business model as necessary to stay competitive and win.
Our workforce
To better position ourselves for long-term profitability and growth, and following a thorough review across all industries, we have reduced our workforce by approximately 2,000 employees, or 6% of our total workforce. This allows us to become more dynamic and agile and streamline our processes while still serving our customers. Those affected will be contacted today.
This very difficult decision was not taken lightly. We recognize that we are saying goodbye to beloved colleagues and friends, and as a leadership team we are committed to supporting those affected in the days ahead.
We offer career transition assistance, including individual career coaching sessions, help with resume updates, on-demand interviewing and networking resources, and tips to increase one’s social media presence. In addition, we will maintain access to Workday so that employees affected by the decision can apply for other open positions at GEICO, and provide existing benefits, including health insurance, during the notice period.
Connected workplace
Our company culture is an essential part of who we are, and we believe that spending time in the office, combined with virtual work, will help us maintain and build on that culture. We believe that being in the same place can foster a sense of community and connection, and that meaningful time together will allow us to build relationships that build trust and strengthen our sense of belonging.
In this sense, we will soon increase our collective presence in the office. Your leaders share the required number of working days in the office, based on customer and business needs. Work with your leader to clarify these policies for your specific department or industry.
We understand that extra time in the office is a shift from what has been common in most companies and industries in recent years. We will take time to get used to this policy and aim for full implementation by January 1, 2024.
We also understand that many of you are currently working completely remotely or have a previously agreed structure of hybrid work. We ask that you confirm your expectations in the office with your manager in response to the new guidelines. Accommodation considerations regarding medical conditions, pregnancy, and/or disability must be submitted through this application.
The path forward
The foundation we lay today is what will prepare us for the future, and we must all align our work, our time and our resources with these shared priorities:
- Serve our customers through the channels of their choice by delivering a seamless, best-in-class experience from policy quoting to claims settlement
- Become number 1 in the automotive industry and continue to expand our product offering while maintaining discipline on pricing and profitability
- Drive financial accuracy while delivering operational excellence and efficiency
- Stabilize, simplify, and fully modernize our technology and data architecture
- Transform our corporate culture by attracting and retaining top talent, fostering a diverse and inclusive culture that promotes collaboration and high performance standards while setting our employees up for success
We will provide details in the coming weeks about these shared priorities and the operating principles that will help us get there together.
Related to this, we need to communicate better and provide the why behind the decisions we make to move our business forward. This is a priority for our leaders, and you can expect an increased emphasis on employee communications in the coming months.
We have been proud for years that we can be there for customers in the event of unexpected events, by anticipating what will happen tomorrow. To remain one of the best in the industry and achieve our vision of becoming the most customer-centric company in the insurance industry, we must be prepared to adapt and thrive in an evolving insurance and business landscape.
Thank you for all you do for GEICO. We are committed to leading GEICO to a better future together.