State Farm leaving Tacoma in 2018. Hundreds face layoffs and uncertain futures

State Farm announced Thursday it will close its two Tacoma offices by the end of the year, potentially putting 800 out of work.

The insurer’s Tacoma operation — call centers that handle claims — is split between offices at the Frank Russell Building, 909 A. St., and at the Columbia Bank Center at 1301 A. St.

About 1,400 people in total work at the two sites. Of those, 600 jobs will be relocated to State Farm’s DuPont office, where about 1,000 people already work.

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Another 250 jobs will be moved to the company’s headquarters in Bloomington, Illinois, and about 150 jobs to Phoenix, State Farm spokesman Sevag Sarkissiansaid.

“These employees may have the opportunity to apply for other positions in other State Farm locations,” Sarkissian said.

This means 400 workers won’t have jobs and another 400 might not, if they are not picked for the Phoenix and Bloomington positions.

“Those are good jobs and it’s going to be a huge blow to the economy, to the county,” said Denise Dyer, director for the Pierce County office of Economic Development. “I’m thrilled that 600 of them are going to be located to DuPont, but that leaves another 800 folks that will be looking for work.”

State Farm is leaving Tacoma, Sarkissian said, to gain “efficiency through streamlining and improving processes, adapting to the changing needs of customers and optimizing available space in current facilities” among other factors.

There is no immediate timetable for the reduction in Tacoma, other than to be completed by the end of the year. The company’se five-year lease on the Frank Russell building expires Dec. 31, according to Bruce Kendall, head of the Economic Development Board for Tacoma-Pierce County.

The loss of 1,400 jobs in downtown Tacoma will be keenly felt, Dyer said, from “standing in line at Starbucks to get a cup of coffee to the parking garage that I park in.”

Mayor Victoria Woodards said the region’s economic development partners will need to come together to recruit another company for the State Farm office space.

“We have a year to figure this out, and hopefully it will look like one truck moves out one day and another moving truck moves in on another,” she said. “We get inquiries all the time about available office space.”

DuPont’s city manager, Ted Danek, called State Farm’s announcement “bittersweet.”

“I’m really sorry for the folks that are getting displaced and don’t have a job,” he said. “I’m happy at least a portion get to stay in the area. DuPont is quite happy to host them, and we’re quite happy they’re coming.”

State Farm signed its Tacoma leases in 2013, when the city and nation’s economy was still reeling from the recession, said Tom Pierson, president and CEO of the Tacoma-Pierce County Chamber.

Times have changed, and now there’s a shortage of Class A office space downtown, he said.

“We know businesses are looking to expand or locate to Tacoma,” Pierson said.

Getting State Farm to Tacoma was not easy. Even when the news broke in April 2013 of the company’s expansion into the city, State Farm told workers it would continue operations at its DuPont facility.

State Farm’s Tacoma claims center took residence in 300,000 square feet once occupied by Russell Investments, which left town in 2010 after three generations in Tacoma.

The insurance company occupied the former Russell headquarters, as well as four floors in the Columbia Bank Center.

In recent years, the insurer was known for its rounds of hirings. It held at least six job fairs, once seeking to fill 500 jobs, in the area since 2013.

The Economic Development Board listed State Farm as Pierce County’s third-largest private company in 2017. That ranking won’t change this year since it still will have 1,600 employees in DuPont.

Boeing is the next largest employer, according to the list, with 1,575 workers.

State Farm’s action comes on the heels of DaVita’s gradual withdrawal of 500 business unit employees from Tacoma to Federal Way by 2021.

When State Farm first came to Tacoma , officials were cautiously optimistic what the future held for the city and the company.

In 2013, Mike Hickey of Neil Walter Co., the Tacoma brokerage and management firm that negotiated on behalf of Columbia Bank Center, noted:

“Investors will take note of the decision, but they’ll study it,” he said. “The decision is significant. We need to see how they become involved in our community.

“Are they invested? Or are they just visiting?”