Major Columbus employer Aflac confirmed Thursday it is outsourcing some of its information technology department, with 45 people being “displaced.”
The supplemental health and life insurer, headquartered on Wynnton Road, said it is calling the move a “displacement,” rather than a layoff, because 30 of the IT staffers are expected to land jobs with a third-party vendor. The 15 other employees will be allowed to apply for 20 or so open jobs within the company. It said the Aflac positions were held open in anticipation of the announcement to employees Monday.
Aflac, which does business in the U.S. and Japan, declined to name the vendor it will be using to upgrade its aging IT systems, but said the company has agreed to set up a Columbus facility and hire as many as 30 of the former Aflac workers.
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The insurer, which also operates a large campus in east Columbus named in honor of Paul S. Amos, one of the company’s three founding brothers, said it is “likely” some of the impacted Aflac employees will retire from the firm, then be hired by the vendor, thus allowing them to collect a company pension while continuing to work for the vendor.
“Aflac, like all other businesses, has a fiduciary responsibility to consistently reevaluate processes and technology to ensure that we continue to provide the best services and products to our key stakeholders,” the company said in a statement issued Thursday through Jon Sullivan, Aflac’s director of corporate communications.
“We are upgrading our business processes as part of a natural evolution resulting from technological advancements to create greater operational efficiencies and to protect our business from potential threats,” the company statement said. “As part of this plan, we do anticipate some reorganization that could impact certain positions. We will offer training and other potential opportunities for existing employees who are interested.”
Sullivan, when asked, confirmed that the “potential threats” are possible hackers that might attempt to steal its customers’ vital information. He also said the impacted workers are a “small portion” of Aflac’s overall information technology department.
Aflac, known for its popular duck advertising campaign, employed 4,141 staffers in Columbus as of the end of May. That’s out of 5,474 total workers overall in the U.S. The company has 4,666 people on its payroll in Japan. That gives the firm a total worldwide workforce of 10,140.
The insurer last week reported a second-quarter profit of $713 million on total revenues of $5.42 billion, a 30 percent gain over the same April-June period of 2016. In its earnings release, Aflac Chairman and Chief Executive Officer Dan Amos touched on information technology expenditures in the second half of this year.
“As we continue to focus on initiatives designed to drive future growth, our expectation is to increase spending, particularly related to IT and promotional expenditures,” he said, stressing the firm is “on track to produce stable operating earnings per diluted share of $6.40 to $6.65” for all of 2017.
“As always, we are working very hard to achieve our earnings-per-share objective while also making sure we deliver on our promise to policyholders,” Amos said.
Aflac shares, like the overall stock market, have been moving steadily higher this year. They topped $81 per share on Wednesday, then pushed upward to $81.45 apiece in trading Thursday before giving back the day’s gain and closing just under $81 per share.
Aflac was founded in Columbus in 1955 by brothers John, Paul and Bill Amos. Paul, the last surviving brother who died in 2014, is the father of CEO Amos.