United Guaranty cutting 160 jobs
GREENSBORO — United Guaranty, the troubled mortgage insurer based in Greensboro, is laying off 160 workers, most of them in North Carolina, the company said Tuesday.
“Ongoing and challenging market conditions require this step be taken,” said Eric Martinez, the company’s chief executive officer, in a statement.
The company declined to say how many of the job cuts would be at its headquarters on North Elm Street, where about 500 people work. The company said that jobs in the office and the field would be cut, however.
United Guaranty employs about 950 people worldwide.
Assuming that the total in Greensboro is close to 160, said local leaders, the city’s economy will take a hard blow.
“You hate to see any business downsize and particularly the quality and the type of people that have been involved at United Guaranty,” said Pat Danahy, the chief executive officer of economic development agency The Greensboro Partnership.
Cuts may be crucial to keeping the company healthy, Danahy said, but it doesn’t cushion the effect on the jobless.
“This is a day you hate to see for the people involved and for the less-than-positive impact on both the downtown and our economy in general,” Danahy said.
United Guaranty said the workers will all receive outplacement services and a “working notice period” to help remaining workers take over jobs, the statement said.
Dozens of workers streaming out of the headquarters during the lunch hour declined to give interviews because the company had told them not to speak with the media.
Losing jobs is an obvious trauma to the city, but philanthropists say any erosion of corporate leadership also hurts foundations and charities.
“United Guaranty is clearly one of our leading executive-type employment entities in the community,” said Ed Kitchen, vice president of the Joseph M. Bryan Foundation.
Billy Nutt, United Guaranty’s former CEO who was forced out of the company earlier this month, serves on the foundation’s board.
“When we first heard about Billy Nutt, that was a real blow in terms of his corporate leadership,” Kitchen said.
Nutt and his executives have supported the United Way, local public education and other major community causes, Kitchen said.
“The loss of those kinds of jobs hurts us a great deal.”
A subsidiary of American International Group, United Guaranty was battered in the world financial crisis, losing $2.5 billion last year.
Nutt, with 30 years of experience at the company, was replaced by Martinez from AIG headquarters.
In addition to Tuesday’s layoffs, remaining employees are wondering whether AIG intends to keep United Guaranty, sell it or even go to the extreme of doing a “runoff,” where it would stop writing policies and slowly go out of business.
All options are on the table now, the company has said.
For the moment, it will be almost impossible for business recruitment groups like Danahy’s partnership to lure jobs to replace those being lost.
“The overall international global economy has got to improve before we’re going to see a significant move toward jobs being created,” Danahy said, “as opposed to being lost.”
Contact Richard M. Barron at 373-7371 or richard.barron@news-record.com
Accompanying Photos
Photo Caption: AIG’s United Guaranty Corp. in Greensboro.
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