ING Groep NV began laying off 400 people in its US insurance operation as it prepares to sell the unit in an IPO. The cuts amount to a 5% reduction at the unit, which will employ about 7600 people when the layoffs are complete. In addition, ING is eliminating 200 open positions.
The plan involves the elimination of the unit's individual retirement wholesale distribution channel that sold annuities through broker-dealers. The company is also laying off workers as it continues to integrate CitiStreet, the administrator of retirement and benefit plans it acquired in 2008.
Executives of the parent company made a long-awaited announcement that it will most likely sell off its insurance operations in Europe and the US in two separate IPOs. ING is being forced by the European Commission to sell them and nearly halve its balance sheet in return for getting approval for the multi-billion euro rescue it received from the Dutch government at the height of the financial crisis. The selling of the insurance units, which it expects to complete before the end of 2013, will transform ING into a merely Europe-focused bank.
Source: Fox Business