State Farm cuts nearly 900 IT jobs in Bloomington; some to be relocated

State Farm
State Farm plans to relocate close to 400 IT positions to locations in Atlanta, Dallas and Phoenix. (WJBC file photo)

By Eric Stock, Greg Halbleib and Patrick Baron

BLOOMINGTON – State Farm Insurance has notified its employees that 890 information technology jobs are being cut in Bloomington as part an ongoing restructuring of its IT department.

The insurance company issued a statement on Tuesday indicating 280 of those jobs would be moved to its operations in Phoenix, 70 jobs would be transferred to Dallas and 30 positions would be shifted to Atlanta.

“We expect to see an overall reduction of approximately 500 non-management professional-level IT jobs across State Farm,” the statement said.

State Farm added the company plans to maintain a Bloomington workforce of around 15,000 employees, adding it recently added 300 positions in its claims department in Bloomington.

A State Farm spokesperson said effected employees will be able to seek relocation or transfer to other departments.

“Some employees may choose to retire or pursue other opportunities outside of State Farm, others may be eligible for severane benefits,” the statement said.

Last fall, State Farm started realigning its Information technology area from three departments into one now called Enterprise Technology.

“This effort will better serve customers’ increasing expectation for simpler, faster, technology-driven ways to do business with our company,” the statement said.

Meanwhile, CEO of the Bloomington-Normal Economic Development Council Kyle Ham says the move serves as a reminder to have a diverse economy.

“It’s a number that will have some affect on local economy, from our retail or housing,” Ham explained. “But it stresses the importance of why we want to diversify the local economy.”

Ham pointed to economic ventures with companies Rivian Automotive and Brandt Industries as ways the Twin Cities have bolstered its economic portfolio.

State Farm has not released a timeline for the job realignment.

A local economic leader believes State Farm’s decision to transfer almost 900 IT jobs out of the area may be in the company’s best interest.

Bloomington-Normal Economic Development Council CEO Kyle Ham explained while those affected may feel a sting, moving those jobs out of the Twin Cities could benefit State Farm in the long run.

“They’re such a force in the community and we’re proud to have them here,” Ham said. “They’re making some changes now which aren’t always easy for those that are affected, but I think the changes that are being made are to help the long-term stability of State Farm here in our community.”

Ham said there must be a focus to diversify the local economy to lessen the impact of large cuts from an employer like State Farm.

Republican candidate for state representative David Paul Blumenshine said there have been signs that State Farm might shift some duties and workers elsewhere.

“They don’t go and set up shop in Dallas, Phoenix and Atlanta, and if they were ever to have a castastrophic disruption, they’d be able to move data,” Blumenshine told WJBC’s Sam Wood. “And, the culture of Illinois, we’re not doing things to make companies excited about being in Illinois.”

His incumbent opponent in the primary, State Representative Dan Brady, said he’s disappointed in the news but is encouraged by other opportunities for the laid-off workers.

“Obviously hundreds of local families depend upon those jobs and will be facing uncertainty,” Brady (R-Normal) said in a release. “The expected addition of several hundred new positions at State Farm’s local claims division is a positive though, and it is my hope that many of the laid-off workers can take advantage of these new positions or others within the company.”

Eric Stock can be reached at eric.stock@cumulus.com.

WJBC will update this story.

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