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Business and Economy

State Farm To Cut 890 IT Jobs In Bloomington

State Farm HQ building
Ralph Weisheit
State Farm headquarters building in Bloomington.

State Farm announced Tuesday it will cut around 890 jobs in Bloomington as part of an IT restructuring project that will add similar positions in Atlanta, Dallas, and Phoenix.

The announcement caps months of speculation and rumors about possible changes to State Farm’s workforce. The company says its overall local workforce will remain around 15,000, though it’s unclear if employees moving into Bloomington—many in Claims—will make similar wages as those working in IT.

“Just like any business, we must continually look for ways to evolve towards the future and serve our customers in a more efficient way,” State Farm said in a statement Tuesday. “Reviewing and adjusting our processes, departments and facilities helps position the company and its employees for the future and remain strong for State Farm policyholders.”

State Farm—Bloomington-Normal’s largest employer—announced the major IT realignment last fall, but Tuesday’s announcement was the first disclosure of how many jobs would be lost.

Some of the 890 employees will be able to apply to other positions or relocate within State Farm. Others are retiring and may be eligible for severance benefits.

Companywide, State Farm’s non-management IT workforce will shrink by 500. Bloomington will take the brunt of those losses (890), while the same types of jobs will grow in Phoenix (adding 280 positions), Dallas (70), and Atlanta (30).

The IT restructuring will merge three departments into one, called Enterprise Technology, in hopes of better serving customer needs, State Farm said.

State Farm says the local workforce will remain around 15,000 because hundreds of Claims positions will be moving into Bloomington. That includes 250 Claims positions from closing offices in Tacoma, Washington, plus another 300 additional Claims jobs.

When asked about the pay differential between Claims jobs and the IT jobs being cut, a State Farm spokesperson declined comment and said that was proprietary. State Farm has around 67,000 employees across the country.

“State Farm is committed to continuously improving our processes, departments and facilities in order to place the company and its employees in a position of financial strength that best serves our State Farm policyholders,” the company said.

The moves come after a tough 2017 year for State Farm’s bottom line. The company last week reported its second-straight year of operating losses for its property-casualty insurance businesses, citing significant catastrophe losses in 2017. That pretax operating loss of $1.7 billion was the largest such loss in recent years. The company pledged to get leaner and make significant internal changes.

State Rep. Dan Brady, R-Bloomington, said he was "very disappointed" to hear about the job cuts.

"Obviously hundreds of local families depend upon those jobs and will be facing uncertainty,” Brady said in a statement. “The expected addition of several hundred new positions at State Farm’s local claims division is a positive though, and it is my hope that many of the laid-off workers can take advantage of these new positions or others within the company."

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