19 Nov American Family explains cuts in contractor workforce
Madison, Wis. – Ken Muth was quick to correct the use of the term “layoffs” to describe what just happened to 160 contracted information technology workers at American Family Insurance.
Muth, media relations director for the Madison-based property-casualty insurer, wasn’t soft-peddling the business conditions that led to the decision to cut the positions effective next month, but he stressed that the affected employees were contracted workers.
The company still has more than 1,000 full-time information technology workers, and another 300 contract workers, he said. Contracted employees come from a variety of local and national vendors, and those whose positions will be cut were informed last week by their vendors companies.
Muth said American Family uses IT contracted workers for the flexibility it affords. “We use contractors to supplement our full-time IT workforce,” Muth noted. “That allows us to scale up or down depending on business conditions and need.”
Given existing business conditions, the scale is heading down. American Family is the nation’s fourth largest home insurer, and it sells auto insurance in 18 states. New home sales and new car sales are down, and this impacts American Family’s IT needs, Muth said.
The company pursues hundreds of IT projects, and it now will focus on projects that provide the most value to the business, especially those related to customer service and IT infrastructure, Muth said.
According to Muth, the cutbacks do not alter the respective duties of Kristin Kirkconnell, the company’s new senior vice president of information services, or Byrne Chapman, vice president of technology operations and infrastructure.
“We’ve had fluctuations before as part of our business,” Muth said. “It’s a natural part of our business.”
American Family, the largest company in Dane County in terms of annual revenue, employs 3,800 workers in Greater Madison and more than 8,500 nationwide.