U.S. mortgage insurer Genworth
Financial announced they are cutting 400 jobs to reduce costs by up to $90 million a year - but those cuts will not be felt north of the border.
“The changes announced today by our majority shareholder Genworth Financial relate mainly to their U.S.-based operations and did not impact the Canadian business,” says Lisa Azzuolo, director of communications for Genworth Canada.
The U.S. announcement came yesterday, with Chief Executive Tom McInerney issuing a prepared statement that “we do not believe these actions significantly change our previously disclosed views on performance in 2013, but anticipate them to have a more meaningful impact in future years.”
Unwilling to disclose where the cuts would be made among the 5,800 employees, it did state that the job cuts would include 150 positions that would not be filled.
U.S. Genworth had sold its wealth management and alternative investment businesses in March for $413 million to repay debt. The company currently has about $4.76 billion in long-term debt.
In Genworth Canada’s recent annual report, Genworth Canada Chairman and CEO Brian Hurley reported to shareholders that “throughout 2012 the company continued its trend of solid annual growth, reporting strong results each quarter. And in the first quarter earnings release the company reported solid results that exceeded expectations.”
American mortgage insurers like Genworth, Radian Group, Old Republic International and MGIC Investment Corporation had sold billions of dollars of policies at low prices during the housing boom, and were stuck with huge losses when the market crashed in 2008.
However, U.S. Genworth’s first quarter profits have more than doubled as the American housing market recovers, helping boost the mortgage insurance business in the process.