CNA Financial Cuts Work Force by 1,850
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Insurer CNA Financial Corp. announced 1,850 job cuts--about 10% of its staff--as part of an effort to cut costs and said it faced $50 million in losses on policies issued to bankrupt energy trader Enron Corp.
The restructuring and job cuts will result in a fourth-quarter charge of $114 million to $124 million, CNA officials said. Most of the job cuts will be made at CNA’s Chicago headquarters.
Losses on the Enron surety bonds--insurance policies that pay out if the buyer fails to fulfill contracts or financial obligations on time--will take another $50 million of that quarter’s after-tax earnings. CNA, which is majority owned by Loews Corp., said those losses stem partly from its reinsurance of surety bonds issued by insurers.
CNA’s shares rose 52 cents to $28.33 on the NYSE.
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