State Farm employees were reeling Friday from the shock of Thursday’s announcement that the company plans to shutter its Tacoma operations by the end of this year.
“I hope I’m one of those who’s able to stay (employed),” said Mindy Grame of Tacoma, a claims worker. “Not knowing is rough. Do I look? Do I cross my fingers? I really like working for State Farm.”
Potentially 800 people could be out of work of the 1,400 people in the company’s two downtown Tacoma offices. Workers will have to reapply for about 600 jobs in DuPont, 250 jobs Bloomington, Illinois and 150 jobs in Phoenix.
Those reached Friday said they enjoy working for State Farm and hope they get selected for open positions in DuPont. Some were near tears as they spoke outside of the Frank Russell building Friday at lunchtime.
Other companies in the region are hiring. Insurance giant Allstate plans to hire 600 in the Northwest, including 200 in Washington state alone.
“It’s hard not to be disappointed,” said said Rebecca Coffino, who works in State Farm’s claims department. The Parkland resident said she’s worked there since October. “I love working here and I hope I can continue. They do treat us good. It’s a business decision.”
Joseph Porter of Tacoma, a claims adjuster, said after Thursday’s news that he’s assessing his life.
“It’s a great environment,” Porter said of working there, “and it’s just an unfortunate situation.”
Many workers patronize Tacoma restaurants for lunch and dinner. At The Forum, kitchen manager Vlad Sepanovs said he is sad to see State Farm go.
“We are one of the closest businesses,” Sepanovs said.
He’s confident the company’s space will attract another employer, and he’s not too particular what kind.
“We welcome all kind of people,” he said. “I’m just surprised they are closing up.”
Down the street at The Office Bar & Grill, owner Travis Scheff said, “Here we go again” with yet another company moving out of downtown Tacoma.
Last year, DaVita announced it was taking its 500 business-unit workers from downtown Tacoma to Federal Way within about four years. Scheff said he expects to see fewer people in his Pacific Avenue bar now that State Farm is closing but was hopeful another business would move in.
“Amazon would be great. We’re ready for it now,” he said.
Last May, State Farm announced it planned to close 11 operations centers throughout the nation between 2018 and 2021. The work from those offices was to be shifted to the company headquarters in Bloomington, Atlanta, Dallas and Phoenix, among other locations.
Tacoma’s location was not listed among those slated for closure at that time. Neither was DuPont.
“While State Farm continues to look at the way it uses its physical space, we plan to continue to use the DuPont Operations Center,” company spokesman Sevag Sarkissian told The News Tribune on Friday.
More competition, rising claims costs
Kenton Brine, president of the Northwest Insurance Council, said that while he couldn’t speak specifically to State Farm’s actions, the insurance industry overall has seen more competition for market share, particularly in auto insurance.
Brine also noted it’s a time of transition not only in the health care marketplace but also for life insurance and property casualty insurance.
Contributing factors, according to Brine, include automation, including the use of “chatbots,” to interact and calculate customers’ needs; rising claims costs; and preparing for the next era of autonomous driving.
“If there is a trend, it is about companies looking for streamlining and efficiency opportunities where they can, knowing that change is in the wind,” Brine said Friday.
Also, he noted, “Companies can’t simply ‘charge more’ to make up for higher costs — they must find ways to be more efficient.”
These factors “may mean some companies actually grow their workforce in our state to respond to our growing local economy, while others use resources elsewhere to reduce or consolidate workload.”