San Antonio’s largest employer USAA announced last week that it would be making more cuts to its workforce after reporting the first business loss ever seen in its 100 years of running.
The banking and insurance company serving the military community revealed that 300 people would be laid off in a statement on May 16, according to My San Antonio.
This adds to 130 employees released in February and 475 staff members let go in March as part of an effort to get lean by “exiting unused offices, reducing management layers and expenses, and realigning staffing,” according to MySA.
While USAA employed approximately 19,000 workers in San Antonio as of 2022, it reported employing 35,000 employees nationwide. As such, the recent loss of roughly 900 employees was spread out across the company, affecting various departments and locations.
Headquartered in San Antonio, USAA has offices in Plano, Texas; Tampa, Florida; Colorado Springs, Colorado; Charlotte, North Carolina; Phoenix, Arizona; and Chesapeake, Virginia.
While noting that the recent round of layoffs was a “difficult decision,” the statement from USAA claimed that the cuts were “necessary adjustments to run a healthy business and provide members with exceptional service and competitive prices,” according to MySA.
Financial troubles in the evolving business landscape have struck several major U.S. employers of late and pushed them to make staff reductions.
Disney rolled out its mass layoff plan of 7,000 people in late March, as The Dallas Express reported. This was roughly at the same time as Accenture announced that 19,000 jobs would be cut worldwide.
Some companies like automaker General Motors have taken different strategies in response to the need to cut costs. As The Dallas Express reported, roughly 5,000 GM employees accepted the auto giant’s offer to voluntarily separate in a bid to save approximately $1 billion per year.
Contributing to USAA’s decision to lay off more employees was the historic loss reported in its 2022 financial report released on May 1.
Economic challenges, such as the insurance claims from events like Hurricane Ian, led to a net income loss of $1.3 billion. This represented a significant reduction compared to the $3.3 billion profit the company recorded in 2021.
USAA additionally experienced a 3% decrease in revenue compared to the previous year, coupled with a 13% rise in losses, benefits, and expenses.
Hurricane Ian wasn’t the only storm.
“Coming out of the pandemic, the perfect storm of inflation, rising interest rates, supply chain disruption, labor shortage, and intense weather led to a very challenging year for the association in 2022,” Wayne Peacock, USAA president and CEO, explained in the report.
As The Dallas Express recently reported, the persistence of high inflation has led some to predict further interest rate hikes by the Federal Reserve.