Manulife to cut jobs in tech makeover
‘Our industry has not kept pace,’ CEO says
TORONTO • Manulife Financial Corp. unveiled a blueprint for its Canadian business on Thursday that envisions more technology — and fewer people.
In announcing a plan to “transform” its operations in Canada, Manulife said it would digitize and consolidate back-office functions, automate existing customer transactions and rejig the “real-estate footprint” for its headquarters.
As a result, the Torontobased insurance and financial services firm said it expects to cut about 700 jobs, or 5.3 per cent of its Canadian workforce, over the next 18 months. It would accomplish this, a release said, “through a voluntary exit program and natural attrition.”
The move comes as a number of financial service firms are turning to technologies such as artificial intelligence to try to streamline their operations, drive down costs and keep up with customers who are used to being served online and through their mobile devices.
Those same companies are also facing the prospect of leaner technology startups eating into their market share, pushing firms towards innovation of their own.
“People have embraced technology in most aspects of life, and they expect their financial services provider to do the same, delivering simple, intuitive and personalized products and services that meet their needs,” said Michael Doughty, president and chief executive of Manulife Canada, in a release. “Our industry has not kept pace with this change.”
Manulife said it is also shrinking its Canadian division headquarters in Kitchener-Waterloo. Ont. from two locations to one, “reinventing its workplace to foster more collaboration and innovation, and ensuring that its real-estate footprint efficiently matches the needs of its business.”
The company stressed in its release, however, that it was still “fully committed” to Kitchener-Waterloo and other major hubs for its Canadian business in Halifax, Toronto, Oakville, Ont., and Montreal.
“We believe that to meet and exceed our customers’ expectations, we must provide personalized service at the moments in life when they most need our support and advice, whether that’s a birth, a first home purchase, retirement or the death of a loved one,” Doughty said. “We are building our customer service model around this concept, and leveraging technology to achieve it in a modern, relevant and exciting way.”
All of these actions, Manulife said, were part of a broader plan to keep growing its Canadian business. This plan includes the company’s return to the market for participating whole life insurance, in which premiums are pooled together and invested, with dividends paid to policy-holders. That market makes up more than half of all insurance sales in Canada, according to Manulife.
As part of that big picture, the insurer has also rolled out an artificial intelligence algorithm for underwriting process, “which makes Manulife the first insurer in Canada to use an AI tool to automatically make underwriting decisions,” the release said.
The company said it also intends to retrain employees and hire workers with digital skills.
According to Manulife, the company has approximately 35,000 employees, including more than 13,000 in Canada. It also had more than $1.1 trillion in assets under management and administration as of the end of March.
“We expect the plans we’re announcing today will have a significant positive impact on our business, simultaneously improving customer experience, reducing costs to make us more competitive, and enhancing our workforce to ensure we can win in a world of rapidly changing customer expectations,” Doughty said.