Principal Financial Group today told 550 employees that their jobs will be eliminated on December 31st. The decision affects 300 workers at the company’s headquarters in Des Moines. The 550 total layoffs represents about 3.5% of the company’s global workforce.
Principal Senior Vice-President Mary O’Keefe says the company has been trying to avoid job cuts since the stock markets began to worsen in September. "We cut advertising and sponsorships, we reduced travel, we looked at everything from increases in salaries next year for professional and management levels, we suspended some amenities, we didn’t fill open positions," O’Keefe told Radio Iowa. "So, we did everything we could and we didn’t quite close the gap…that’s why we took the action we did today."
The affected employees will receive a severance package and career assistance, according to a company press release. O’Keefe says the 250 employees getting pink slips outside of Des Moines are in 45 locations around the globe. She did not have specific information, but O’Keefe says some of those workers could be employed in other Principal offices in Mason City, Cedar Falls and Ottumwa.
Today’s announcement is believed to be the biggest layoff notification in Principal’s history. "It’s also the most unprecedented economy and market condition that we’ve seen," O’Keefe said. "We’re 129 years old and we’ve managed through a lot of economic cycles…but this is really unprecedented." O’Keefe believes the company can avoid further job cuts in the coming months.
"Right now, we have our expenses in line with our projected revenues. We believe that we’ll be in good shape," O’Keefe said. Last month, Principal told state economic development officials that the company was no longer interested in tax incentives in exchange for creating 900 new jobs in Iowa. Principal is one of the largest employers in Des Moines.