The State Worker

Chronicling civil-service life for California state workers

October 6, 2011
Read State Fund chief's layoff e-mail to employees

Thumbnail image for 100727 rowe.JPGAs we reported earlier today, State Compensation Insurance Fund's President and CEO Tom Rowe has announced a plan to layoff up to 1,800 of the organization's 7,300 employees by the second quarter of next year.

Here's the text of the e-mail that went out at noon:

From: Tom Rowe
Sent: Thursday, October 06, 2011 11:58 AM
To: SCIF AllUsers
Subject: Important Announcement

I'm writing today to share some important news about restructuring at State Fund. We have decided to implement in 2012 a reduction in force that will eliminate between 1,500 and 1,800 positions. The positions being eliminated are in areas where business processes have changed significantly enough that work has been substantially reduced.

As you may know, we operate at an expense ratio over 90 percent. We spend more operating the company than we do on benefits to injured employees.

To better understand our staffing requirements, we conducted a detailed review of all aspects of State Fund's business. This work included comparing ourselves to other state funds and specialty companies that write workers' compensation in California. Like most insurance companies, the biggest operating expense is staffing.

After reviewing all the data and adjusting our findings to account for operations/obligations unique to State Fund we determined that by the end of 2011 we will be overstaffed by more than 30 percent - approximately 2,000 positions companywide.

We don't have all the details yet, but we anticipate layoffs being effective by the 2nd Quarter of 2012. A brief Q&A is attached and we will share more details as we have them. We will do this as respectfully as possible and are prepared to invest significantly in doing the right things by employees who are displaced. We will actively engage the Union in this process.

Additionally some employees will be transferred into a temporary resource program to provide staff for short-term corporate projects, as well as be provided opportunities to develop skills better aligned with current and future business needs.

Program managers and executives will be holding town-hall meetings in all programs over the next few weeks with staff to review the plan and answer questions.

Although painful, I am confident that in the long term, the moves we are taking will help stabilize the workers' compensation market and State Fund's position in it as a strong, efficient and fairly priced choice for California's businesses.

Sincerely,

Tom Rowe

PHOTO: Courtesy State Compensation Insurance Fund, 2010.

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About The State Worker

Jon Ortiz The Author

Jon Ortiz launched The State Worker blog and a companion column in 2008 to cover state government from the perspective of California government employees. Every day he filters the news through a single question: "What does this mean for state workers?" Join Ortiz for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at jortiz@sacbee.com.

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