Facing what it called a “challenging economy,” USAA announced recently that it had laid off 1% of its total workforce.
USAA let go about 475 employees working in various roles across the company, according to a statement provided by a company spokesman.
“We are investing in technology and modernizing our business while reducing costs by exiting unused offices, reducing management layers and expenses and realigning staffing and work to our most important priorities,” the statement said. “Unfortunately, reprioritizing work means we need fewer teammates in certain areas.”
The insurance and financial services firm employs about 19,000 people in San Antonio and just under that number in its offices in several major U.S. cities, according to its 2021 annual report.
The recent layoffs follow job cuts among the company’s real estate lending staff in 2022.
Company spokesman Christian Bove would not disclose which office locations or departments were affected by the layoffs, or whether the workforce reduction had any impact on third-party contractor positions at USAA.
Recent posts at the online discussion board thelayoff.com showed that both employee and contractor positions in tech were eliminated.
“They laid off entire teams,” posted ITNerd. “Mine included. Said our positions were unnecessary. We all had almost 20+ years or more of experience. We are being replaced by off shore contractors.”
Already this year, U.S.-based tech companies have announced more than 120,000 layoffs, according to a TechCrunch report citing layoffs.fyi data.
An insurance provider serving primarily veterans and their families members, USAA reported a net worth of $40 billion in 2021, according to its annual report. The company responded to 71 catastrophes in both 2020 and 2021, paying out millions of dollars in claims from weather-related events like damaging hurricanes and wildfires nationwide.
With profits down 15.5%, USAA fell nine spots, to 96, on the Fortune 500 based on its 2021 performance.
That decline follows major efforts to simplify its operating structure and return to its core lines of business just ahead of the company’s 100th anniversary in 2022.
USAA sold off its controlling interest in a real estate company in 2019, the same year it also sold the company’s investment management division to Charles Schwab and its mutual fund and exchange-traded fund business and a college savings plan to Victory Capital.
The company has also brought its workers closer to the fold. In December, USAA announced that it planned to vacate its two downtown San Antonio office towers and transition workers to the firm’s main campus at 9800 Fredericksburg Rd.
CEO Wayne Peacock said the shift to hybrid and remote work during the COVID-19 pandemic had left the company with ample space for current and future employees in its sprawling headquarters building.
The recent USAA statement said the company continues to grow and has hired more than 1,600 people in 2023. USAA ranks 50th on Fortune’s Great Places to Work list of the top 50 large insurance and financial services firms.
The recent layoffs “are a normal part of running a healthy business during an economic downturn,” USAA said.
Acknowledging rising inflation, in August 2022 the company boosted the pay of workers making $100,000 or less with a one-time $1,000 bonus, already having raised the hourly minimum pay from $16 to $21 the year before. But in 2021, USAA gave out the lowest annual performance bonus (10.1%) since the employee perk was first made public in 2007.
In recent years, USAA has grappled with millions of dollars in fines and penalties due to regulatory compliance issues.
In 2022, the U.S. Treasury’s Financial Crimes Enforcement Network imposed a $140 million civil money penalty for what it called “willful violations” of the Bank Secrecy Act.
Prior to that, the Office of the Comptroller of the Currency fined USAA $85 million in 2020 for what it deemed unsound banking practices that did not adequately protect customers from risk.
In 2019, the Consumer Financial Protection Bureau ordered the bank to pay $3.5 million in penalties and $12 million in restitution to settle claims that it neglected stop-payment requests and reopened accounts without customers’ consent, among other claims.
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