ING Lays Off 400 In Preparation For U.S. IPO -Memo

ING Groep NV (ING, INGA.AE) began laying off 400 people in its U.S. insurance operation on Wednesday as it prepares to sell the unit in an initial public offering.

The cuts amount to a 5% reduction at the company's U.S. unit, which will employ about 7,600 people when the layoffs are complete.

The chief executive of the U.S. operation, Rob Leary, announced the cuts in a memo to employees Wednesday alongside a "renewed operational plan" to increase sales and reduce administrative costs at the unit, which sells life insurance and retirement products.

That plan involves the elimination of the unit's individual retirement wholesale distribution channel that sold annuities through broker-dealers, Leary wrote in the memo. The company is also laying off workers as it continues to integrate CitiStreet, the administrator of retirement and benefit plans it acquired from Citigroup Inc. (C) and State Street Corp. (STT) in 2008.

In addition, ING is eliminating 200 open positions. The employees being let go will be notified by the end of this week.

"The loss of jobs is concerning for all -- especially in this economy at this time," Leary wrote. "We are committed to treating our departing employees with care and respect."

A spokesman said late Wednesday the cuts "were part of ING's efforts to sharpen its strategic focus and reduce administrative expenses as it prepares for a U.S.-focused IPO."

Earlier Wednesday, executives of the parent company made a long-awaited announcement that it will most likely sell off its insurance operations in Europe and the U.S. in two separate IPOs. ING is being forced by the European Commission to sell them and nearly halve its balance sheet in return for getting approval for the multi-billion euro rescue it received from the Dutch government at the height of the financial crisis.

The selling of the insurance units, which it expects to complete before the end of 2013, will transform ING into a merely Europe-focused bank.

-By Erik Holm, Dow Jones Newswires; 212-416-2892; erik.holm@dowjones.com

(Maarten van Tartwijk contributed to this article.)

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