State Farm to Consolidate Facilities, Displace 4,200 Workers
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State Farm to Consolidate Facilities, Displace 4,200 Workers

On the heels of a $5.5 billion underwriting loss in 2016 and a massive drop in profit, State Farm said it plans to shutter 11 U.S. facilities, displacing 4,200 of the company’s nearly 70,000 workers.

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On the heels of a $5.5 billion underwriting loss in 2016 and a massive drop in profit, State Farm said it plans to shutter 11 U.S. facilities, displacing 4,200 of the company’s nearly 70,000 workers.

Starting in 2018, State Farm said it will close 11 facilities in eight states, shifting the work to the company’s headquarters in Bloomington, Ill., and its offices in Atlanta, Dallas, Phoenix and other existing sites in the United States.

State Farm noted that the 4,200 workers “will continue to have job opportunities in other State Farm locations.”

“We understand the decision to exit these facilities directly affects our employees and their communities,” said Mary Schmidt, executive vice president and chief administrative officer. “While the exits will begin in 2018 and continue over several years, we are announcing this decision now in order to give employees time to make personal and professional decisions. The company will continue to have a strong local presence in these communities through our agents and local claims employees.”

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State Farm said its decision is an effort “to best serve customers by gaining efficiency through streamlining and improving processes, leveraging technology and concentrating employees in larger locations.”

“In order to adapt to the changing needs of our customers and continue to provide the remarkable service that our customers expect, we must continue to manage our business efficiently,”  Schmidt added.

The 11 facilities, and their dates for closing, are:

  • Parsippany, N.J. (2018)
  • Petaluma, Calif. (2018)
  • Kalamazoo, Mich. (2019)
  • Irving, Calif. (2019)
  • Tulsa, Okla. (2019)
  • Indianapolis (2020)
  • Medley, Fla. (2020)
  • Downers Grove, Ill. (2020)
  • West Lafayette, Ind. (2020)
  • Bakersfield, Calif. (2021)
  • Frederick, Md. (2021)

Earlier in the year, State Farm reported a total underwriting loss of $5.5 billion for full-year 2016, including a $7 billion underwriting loss on auto insurance. Net income dropped from $6.2 billion in 2015 to $400 million.

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