ING to Cut 1,600 U.S. Jobs to Boost Profit

ING Groep, the largest Dutch financial services firm, plans to shed 1,600 jobs at its U.S. insurance unit, or 15% of the work force, as $13.8 billion of purchases failed to increase profit as much as the company expected.

ING bought ReliaStar Financial Corp. and two units of Aetna Inc. last year, tripling its U.S. life insurance business. Since then, sales have slumped. The company now is cutting jobs to try to add $150 million to $180 million to pretax profit beginning next year, said a company spokeswoman.

ING, like other insurers, is being forced to cut costs to boost earnings after the Sept. 11 terrorist attacks aggravated an already weakening U.S. economy and caused sales of investment products to slow.

Pretax profit from ING’s life insurance business in the U.S., Canada and Mexico dropped 39% in the third quarter as premiums from life insurance and sales of annuities dropped.

That caused the contribution from ING’s purchases to fall short of expectations.