Northwestern Mutual Life Insurance Co. today announced it will lay off 100 employees this year and hundreds more in 2017.
John Schlifske, chairman and chief executive officer, shared the news with employees this morning. He could not be reached for further comment.
The company, which has about 5,900 Milwaukee-area employees, released a statement confirming the layoffs and attributing them to the impact of persistently low interest rates on its business. Prolonged low interest rates put pressure on insurance companies because of their need to invest assets in lower risk investments, which are producing little return at the moment, said Betsy Hoylman, spokesperson for Northwestern Mutual.
“As we invest in our strategic priorities to meet our clients’ current and future needs, we are also committed to maintaining our strong financial position during this period of unprecedented low interest rates,” Hoylman said. “To balance these two goals, we’ve been evaluating how we work to better serve our clients. While we will continue to focus on hiring people with the skills we need and developing our teams, some positions will be impacted and these decisions have not been easy.”
Some of the 100 cuts being made this year are happening today, Hoylman said. The company has not yet determined the exact number of jobs to be eliminated in 2017. When asked about the type of roles being eliminated, Hoylman said: “This is not an across the board approach. Our decisions are based on our strategic needs for the future.”
Northwestern Mutual earlier this month confirmed it was evaluating potential workforce changes.
The insurer reported record annual revenue in 2015 of $27.9 billion, and plans to pay out $5.6 billion in dividends to policyholders this year. It is in the process of constructing two 30-plus story buildings in downtown Milwaukee. The 1.1 million-square-foot, $450 million headquarters project is expected to be complete in 2017, while the $100 million mixed-use tower will be complete in spring of 2018. The company also just bought a $3.3 million airport hangar for its private jet at General Mitchell International Airport.
“Our Northwestern Mutual Tower and Commons is on track and on schedule,” Hoylman said. “Our other building on Van Buren and Mason, which is part of our real estate portfolio and will generate investment returns for the policyowners, that’s also on track and on schedule and those projects are moving ahead. This is more than cutting expenses. This is a strategic investment in our future.”