MetLife Inc. (MET:US), the largest U.S. life insurer, is shifting workers to North Carolina as Chief Executive Officer Steven Kandarian seeks to reduce costs.
Administrators for the U.S. retail business will be in Charlotte, while some technology and operations employees will be based in Cary, John Calagna, a MetLife spokesman, said today in a phone interview. MetLife will have 2,600 employees in the state by 2015, Governor Pat McCrory said in a statement.
Kandarian is targeting $600 million of cost cuts, mostly in the U.S., at the New York-based insurer as low interest rates weigh on profits. MetLife had 64,000 employees (MET:US) as of Dec. 31., down from 67,000 a year earlier. The move creates a central location for employees who run the U.S. retail business, and a new technology hub, Calagna said.
“We want to be able to have our teams who are working together actually be together and collaborate, and we’re looking to have fewer real-estate locations,” he said.
The insurer is leaving buildings in Lowell, Massachusetts; Somerset, New Jersey; and Aliso Viejo, California, Calagna said. It’s reducing space in cities including Boston; Bloomfield, Connecticut; Irvine, California; Johnstown, Pennsylvania; and Warwick, Rhode Island.
MetLife gained 1.4 percent to $37.05 at 1:16 p.m. in New York, and has advanced 12 percent this year. The Charlotte Observer reported earlier on MetLife’s plans.
The insurer already has an auto and home operation in North Carolina. Calagna said he didn’t know how many employees would transfer to the state and how many would be new hires.
Charlotte, in southwestern North Carolina, is home to Bank of America Corp. (BAC:US) and Duke Energy Corp. Cary, west of the capital city of Raleigh, is near schools including Duke University and North Carolina State University.
Demand for office space is rising in the Charlotte area, where the vacancy rate fell to 12.1 percent in the fourth quarter, down from 12.9 percent a year earlier, according to CoStar Group Inc., a Washington-based research company. Asking rents rose 2.2 percent to $19.39 per square foot in the fourth quarter from $18.98 a year earlier, according to CoStar.
American International Group Inc., the insurer that repaid a U.S. bailout in December, is also seeking to cut costs by shifting employees to lower-cost locations, CEO Robert Benmosche said in a Bloomberg Television interview last month.
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