Fremont General to Cut 29% of Work Force

Fremont General Corp., a Santa Monica-based insurer, said it will cut an additional 29% of its work force in a new effort to slash costs in response to price cutting in its workers’ compensation business. Fremont said it will lay off 465 employees and close 16 of its 24 production and claim-servicing offices, cutting costs by about $55 million a year before taxes. The reductions bring total job losses at the company to 1,000, or 50% of its work force, since June 30. California workers’ compensation insurers have been hit hard by years of price-cutting that followed deregulation of the market in the state in the early 1990s. Fremont, whose shares have fallen 68% this year, said its fourth-quarter operating earnings will be reduced by $228 million after taxes as a result of the job cuts and office closings. Analysts have expected Fremont to report fourth-quarter operating earnings of 13 cents a share, according to a poll of two analysts by First Call/Thomson Financial. Fremont shares rose 13 cents to close at $2.25 on the New York Stock Exchange.