State Farm will drastically reduce the size of its operations center in Parsippany over the next two years, moving about 500 New Jersey jobs to New York and Pennsylvania to cut costs and improve efficiency, the company said July 26 according to NorthJersey.com.
Most of the Parsippany office’s functions will be consolidated into its two other Northeast operations centers, in upstate Ballston Spa, NY and Concordville, PA. Some of the Parsippany employees will be offered jobs in those locations, the company said
The Christie administration was “proactive” in trying to persuade State Farm to keep the jobs in New Jersey, but the insurer’s decision was final, company spokesman Doug Nadeau said. Employees were notified July 24, he said. A bodily injury claims office and a sales training office will remain in Parsippany, but it is unclear how many will be employed there. The Parsippany center currently employs about 700.
“State Farm hopes to retain the largest amount of employees possible,” Nadeau said. Employees who do not want to relocate will be offered severance packages, he said.
A satellite office in Farmingdale, NJ, that employs a dozen people also is slated for closing and a claims office in Melville, NY will be consolidated into one in Lakeville, NY. The changes, expected to be completed by September 2013, are to “better serve customers and achieve business goals through increased efficiency, reduced expenses and establishment of more consistent operations,” Nadeau said.
State Farm, which has more than one million policies in force in New Jersey, last year had a leading share of the state’s home insurance market by premiums, and ranked fourth in automobile premiums, according to the state Department of Banking and Insurance. The insurer, which said in May it was closing two dozen field offices in Illinois, Indiana and Michigan, expects to continue to distribute policies and serve customers in New Jersey through more than 200 independent contractor sales agencies.
State Farm had threatened about a decade ago to exit the auto insurance business in New Jersey, complaining that strict regulation made it too hard to make a profit. But it later backed away from that stance, and the regulations were relaxed in 2003 by former Governor McGreevey.
The coming move will be “seamless” to customers, he said. “We have every intention of continuing to do a vigorous business in New Jersey and growing our market share. Nothing negative about New Jersey, the New Jersey insurance market, or the New Jersey economy that should be inferred from the decision.”