Traverse City-based specialty auto insurer Hagerty Inc. is cutting an additional 4 percent of its workforce just months after a 6 percent cut as it seeks cost savings.
Hagerty (NYSE: HGTY) reported in a Wednesday filing with the Securities and Exchange Commission that it will trim 83 jobs across the company to meet “growth and profitability goals.”
The layoffs were first reported by the Traverse City Record-Eagle earlier Wednesday.
Affected employees will be eligible for severance pay, a benefit stipend and career transition services, the company said in a statement to Crain’s.
“This move is intended to position us for continued long-term growth and profitability as a leading automotive lifestyle brand,” the statement said. “… We will miss our team members who were impacted by the restructuring.”
Hagerty would not say when the layoffs take effect.
The cuts come after Hagerty reduced its workforce in December by about 6 percent, or 103 employees.
Founded in 1983, Hagerty offers membership products and programs and specialty insurance to car and motorcycle collectors.
The company did not respond to a request for the current number of employees. Hagerty had about 1,550 workers as of December 2021, with about 900 based in Traverse City, according to a previous Crain’s report. About 1,445 employees are currently listed on LinkedIn.
Hagerty said in the SEC filing that it expects to save $5 million in the first quarter by reducing its headcount and projects annualized savings of about $20 million to $25 million through the job cuts, reduced hiring plans and other cost-containment initiatives.
Hagerty on March 13 reported fourth-quarter losses narrowed to $32 million from a loss of $66 million from the same period in 2021. Revenues during the quarter grew 28 percent to $197 million.
For the full year, the company posted net income of $2.4 million compared with a net loss of $61 million in 2021. Revenue rose 27 percent to $788 million in 2022.
Hagerty is projecting total revenue growth of 22 percent to 26 percent this year, driven by written premium growth of 11 percent to 13 percent.
With the estimated restructuring charge and net savings over the balance of the year, the company now expects adjusted earnings before interest, taxes, depreciation and amortization ranging from $40 million to $60 million for 2023. Full-year net income is expected to range between a loss of $20 million and break-even, Hagerty said in its March 13 statement.
EDITOR’S NOTE: This story has been updated with new financial data for the company.
