Aegon consolidating operations, moving jobs out of Louisville

LOUISVILLE, KY (WAVE) - Aegon, an international life insurance company that employs hundreds of people in Louisville, has confirmed that it will move most of its operations out of the city beginning in 2011.

Aegon spokeswoman Cindy Nodorft says about 120 out of 400 jobs will remain in Louisville as part of its information technology department. The other 280 employees will either be transferred to Baltimore or Little Rock or laid off.  For those people who are laid off, the company indicates, their employees will receive a severance package based on their number of years with the company.

Employees were given a 60-day notice of the company's on Wednesday.

According to a news release from Aegon's Corporate office, the move is being made to "pursue further operational and cost efficiencies by consolidating its operations currently based in Louisville, Kentucky with other existing U.S. locations."

The news release states that the company ultimately intends to reduce its U.S. workforce by 400 to 500 people.  The consolidation process will begin in 2011 and is expected to take a year to complete.

Nodorft released the following statement regarding the company's plans for Louisville:

Over the past two years, in a challenging business environment, AEGON has taken a number of steps to improve business performance, lower expenses, and sharpen our focus on core businesses.  We can confirm that AEGON has made the decision to consolidate our Louisville operations with other primary AEGON locations. We are consolidating operating locations in an effort to leverage resources and streamline operations – consistent with our focus on capturing operational and cost efficiencies.

The transition will take place over the course of 2011. AEGON Information Technology is remaining in Louisville due to its criticality to AEGON's business continuity planning. There are approximately 120 employees in our AEGON Information Technology division.

We've valued being a corporate citizen of the Louisville area and are in the process of identifying opportunities for transfers.  We will be working closely with our employees during the transition.

At this time, we do not know the exact impact on employment. In some cases employees will be offered relocation opportunities, primarily to Baltimore and Little Rock. Employees impacted will be given the opportunity to apply for future openings in the company as well as other AEGON company locations across the country.

University of Louisville Professor, David Dubofsky said this isn't the first time the company has cut jobs. He said two years ago, the company cut 140 jobs. He said today's announcement will have its impact on the local economy.

"That's 300 people who aren't going to be working here in Louisville. It's 300 families that aren't going to be shopping. {It's} 300 families that aren't going to be eating out. {It's} 300 families that aren't paying taxes and possibly 300 houses {that are} going to be on the market," Professor Dubofsky said.

Joe Reagen, President and CEO of Greater Louisville Inc. had this to say about Aegon's announcement:

"We are obviously disappointed with Aegon's decision to decrease its workforce in Louisville.   Aegon has been a valuable member of Greater Louisville Inc., a generous corporate citizen, and a provider of more than 400 high-quality jobs in our community for several years.

We understand that current economic conditions are forcing many companies throughout the country to make tough choices about consolidation and cost-saving measures and this decision is no different.  We've worked closely with Aegon for several years to maintain its presence here and the company has always very complimentary of our community and the quality of our workforce.

We would have welcomed the opportunity to negotiate, but without a significant business unit of the company headquartered here, it would have been difficult to compete. We are encouraged the company has chosen to keep 100 jobs in Louisville and we will continue to work with Aegon's local leadership to do everything we can to retain as many jobs as possible."

Louisville Mayor Jerry Abramson says the city wasn't given a chance to persuade Aegon officials to stay.

"We are disappointed by Aegon's decision to move much of its Louisville operations to the company's headquarters in Baltimore," Abramson said in a press release. "Because Louisville is by far the smallest piece of their U.S. operations, Aegon made a financial decision to consolidate and they simply did not give us the opportunity to make the case for keeping jobs here."

Abramson says Aegon leaders told him they plan to gradually transfer 300 of the 400 Louisville-based jobs in the next 12 months.

Congressman John Yarmuth says he was "extremely disappointed" by the news, and hopes to work with business leaders to find and create new job opportunities for the displaced Aegon workers.

Meanwhile, Louisville Mayor Elect Greg Fischer said the new administration will try to determine why Aegon made the decision to leave. In the meantime, he said they'll do what they can to help those 280 people find jobs here.

"Anything we can do to help them find jobs, you know, in the city is a priority for me. When people come to Louisville, often they love the place and they don't want to move -as well. So, I'm hopeful maybe some entrepreneurial juices flow out some of the folks saying they're going to have a change now maybe we can have some new jobs and new company will come out of this as well," Fischer said.

According to Reuters, the Netherlands-based company was bailed out by the Dutch government in 2008. The company indicates the consolidation will save about 70-million dollars annually.

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