Allstate to lay off employees, close offices in restructuring plan

Allstate Corp.
ALL,
+0.74%
will lay off employees and close offices in a restructuring plan expected to cost the company nearly $300 million, mostly incurred in the third quarter. The goal is to increase Allstate’s share in the personal property and liability market “by expanding customer access, improving customer value and investing in marketing and technology,” the company said in a statement. Esurance and Allstate brands have merged operations, and Allstate is trying to offer “competitive” prices in auto insurance, which requires cost reductions to maintain margins, it said. About 3,800 employees, mostly in claims, sales, service and support roles, will be affected, Allstate said. “Implementing this plan is difficult as we still deal with the impact of the pandemic but necessary to provide customers the best value,” Chief Executive Tom Wilson said in a statement. Support for the employees include prioritizing internal hiring, extending medical coverage, expanding retraining support and helping in employment searches, Wilson said. The restructuring will result in charges around $290 million, with about $210 million to $220 million in the third quarter. The charges will reduce both net income and adjusted net income, and are primarily due to severance and employee benefits as well as expenses related to office closures, the company said. Shares of Allstate were flat in the extended session Wednesday after ending the regular trading day up 0.8%.