Principal Drops Worker Benefits, Cuts Pay

The Principal Financial Group Principal Financial Group Inc. said Friday it was suspending several employee benefits, including tuition reimbursement, anniversary gifts and employee recognition programs, as part of a cost-cutting program.

Spokeswoman Susan Houser said the Des Moines, Iowa-based financial services company was also cutting pay for workers, management, and its board of directors from 2% to 10% depending on pay level, according to the Associated Press.

The actions are effective immediately and will result in savings throughout 2009, Houser said. Benefits will be restored when conditions improve.

“Due to continued deteriorating conditions in the economy and markets, the Principal announced internally several cost-cutting measures to reduce expenses and better align revenues and expenses,” Houser said in a statement. “These actions are designed to help offset decreased revenues caused by the markets’ unprecedented impact on our asset-based businesses.”

The company reduced its work force by about 3% in December, laying off 550 workers. That included 300 in Des Moines, where the corporate headquarters are located. Another 60 insurance division workers lost their jobs earlier this month.