State Compensation Insurance Fund (SCIF) has officially cancelled the layoff plan it announced last fall, State Fund officials confirm. In 2010 State Fund began a major restructuring of its operations and announced layoffs the following year. According to an email sent out by president and CEO Tom Rowe and obtained by Workers' Comp Executive, the carrier was able, through other means, to reduce enough staff that it made the layoff of 1,500 to 1,800 employees unnecessary. The email reads in pertinent part:
"The combined impact of access to SROA [State Restriction of Appointments] and Surplus status, job fairs, job search, resume writing classes, and transition payments (a first in civil service), have resulted in more than 1,300 employees transitioning out of State Fund.
The number of positions that remain in the restructure plan is now small enough that we have decided to cancel the layoff. This allows all of us to refocus on the future, and avoid the disruption associated with bumping, demotions, and retraining that are the routine elements of a layoff process in California's civil service structure," the email reads.
Back in October State Fund announced that it planned to layoff between 1,500 and 1,800 employees in the May-June 2012 timeframe. At the time State Fund said the planned layoffs were the result of industry comparisons and internal reviews that affected the need for staff. State Fund said the layoffs would result in an annual savings of $150 million. This was on top of the already $200 million annual estimated savings from the overall restructuring plan it announced in 2010 where State Fund closed and consolidated offices requiring almost 1,400 employees to relocate.
Since announcing the layoffs last year, almost 1,000 employees took State Fund up on its transition packages. And in 2012 transfers have really accelerated, says State Fund spokeswoman Jennifer Vargen. SROA status, which gives employees targeted for layoffs in their classes a hiring preference with other state agencies, has helped get employees other jobs in state government.
"Since the beginning of the year about 300 employees have found work at other state agencies. We believe attrition will get us to our staffing target," Vargen says, adding that there are no plans for another layoff, although the second half of State Fund's restructuring plan will begin this fall. It's expected there will be more attrition from that.
Vargen says State Fund is looking at a staffing target of around 4,300 by the end of the year.
SEIU 1000, the union that represents State Fund employees, has been publicly critical of both State Fund's restructuring and the layoffs when they were announced. SEIU was unable to provide an official statement by deadline.
But sources that asked not to be quoted tell Workers' Comp Executive that State Fund cut too much and it began to affect essential policyholder services. "They had to admit enough was enough. They made cuts with a future in mind that didn't exist and probably never will," says one individual familiar with the layoff situation.