Insurance broker Willis Group Holdings says it plans to eliminate 200 full-time positions after reporting a fourth-quarter net loss of more than $800 million due to charges and tax.
Dominic Casserley, Willis CEO, said the firm will take a first quarter charge of about $35 million to $45 million primarily from the elimination of the 200 positions. Willis expects to save $20 million to $25 million starting the second quarter, with annualized savings of approximately $25 million to $30 million.
Willis says the decision to eliminate the positions is a cost savings move that came after an assessment of the firm’s organizational design in the weeks since Casserley took over Jan. 7.
Today was the first Q4 conference call for Casserley as CEO of Willis. He replaced long-time CEO Joe Plumeri who retired from the post at the end of last year.
Turning to earnings, Willis reported a Q4 net loss of $801 million compared to net income of $29 million the prior year. Revenues showed some increase, up 6 percent in the quarter to $871 million.
Willis took $1.06 billion in charges in the quarter related to goodwill impairment in North America, write-offs, bonuses and taxes.
The firm also reduced Q4 2011 net income by $50 million related to a 2011 operational review and $22 million related to write-off of uncollectable accounts receivables.
Scandal hit Willis last year when it discovered fraudulent overstatements in a Chicago office that spanned a six year period. Integration issues related to its Hilb, Rogal & Hobbs acquisition also weighed on the company’s earnings.
For the year, Willis reported a net loss of $433 million compared to net income of $220 million. Revenues rose 1 percent, or $33 million, to $3.5 billion.
On the positive side, the firm pointed to Q4 organic growth of 7.5 percent and 3.1 percent for the year.
When asked by an analyst how long the honeymoon period for the new CEO would last, Casserley said, “I think in the world that we live in today, honeymoons don’t last very long at all.”
Asked about his strategic plan for the firm, Casserley said he would present his ideas during Willis’ Investor’s Day conference this summer.