In 2008, LandAmerica Financial Group Inc. touted a new requirement for all 11,000 employees to chart a clear path for career development. The intention: groom future leaders and enable the Richmond, Virginia-based title insurer to tighten its grip on talent. Learning executives expressed confidence that investing in training would insulate the company from harm as the U.S. real estate market hit an unprecedented bottom.
Little more than a year later, that plan is nothing more than a romantic notion, with no chance of being realized. In February, after enduring several rounds of layoffs, LandAmerica—a Fortune 500 company and one of the nation’s largest title insurance firms—filed for Chapter 11 bankruptcy protection.
The stunning fall from grace is summarized in matter-of-fact fashion in LandAmerica’s recent financial report: "The severe downturn in the housing and mortgage markets and the general credit crisis has placed a significant strain on our liquidity and capital resources to the point that it has become increasingly difficult for us to remain an independent public company."
Translation: Despite seeing revenue more than double between 2000 and 2007, the $4 billion company is flat broke. Most employees have been laid off, and the remaining handful will be gone by April. LandAmerica is expected to completely shut down operations by the end of the year.
The end came swiftly but not without warning. Susan Sinkiewicz, who served as the company’s vice president of talent and learning resources, says in an e-mail that training dollars were cut in the months preceding the bankruptcy filing. The company’s training department also was gutted: Sinkiewicz, whom Workforce Management interviewed for a 2008 feature story, is the only person left there, and her employment is scheduled to end in fewer than 60 days.
LandAmerica’s demise should not reflect poorly on employees, says Josh Bersin of Bersin & Associates, an Oakland, California-based research company that tracks corporate training. Several years ago the company began to integrate employee development and performance management, making it somewhat of a pioneer.
Bersin says employees are paying the price for LandAmerica’s foray into the subprime housing market, whose failure has snowballed into an economic avalanche.
"All the talent processes in the world won’t make up for a bad business model," he says.
Top company executives reportedly hoped a sale of assets would forestall bankruptcy proceedings and enable survivors of previous layoffs to keep their jobs. LandAmerica in December sold its three main underwriting subsidiaries—Lawyers Title Insurance Co., Commonwealth Land Title Corp., and United Capital Title Insurance—to Jacksonville, Florida-based Fidelity National Financial.
As part of the transaction, Fidelity absorbed about 5,500 LandAmerica employees. But a month later, about 1,500 of them were let go as a cost-cutting measure, according to Fidelity National’s February 4 earnings report.
LandAmerica University, which had been the company’s primary center for employee career development, has been eliminated, Sinkiewicz says.
Fidelity has a comparable online educational tool, called Virtual University, that stores, delivers, tracks and documents e-learning for employees, says Fidelity National spokesman Lloyd Osgood.
It’s unclear whether Fidelity will be adding learning resources to help the surviving LandAmerica employees assimilate to the new company.
"Operationally speaking, the new employees will continue to use existing order systems for now. County managers attended a special program to introduce them to the resources FNF offers at the corporate level," Osgood says.
In addition, Fidelity National’s corporate communications team is trying to help the transition employees learn about the company’s products, services and resources, Osgood says.
Only last year, LandAmerica unveiled 14 distinct competencies for employees to develop. Among them were behaviors such as integrity and showing respect for co-workers and customers.
Officials said at the time that they were zeroing in on 300 top performers, including 75 executive managers and 225 managers at its facilities nationwide.
The sad irony is that many of those top performers have been left in the cold. Bersin says the worst probably isn’t over, and other companies may find themselves in similarly perilous situations in 2009 and beyond. He says those companies that shift people around to different jobs and invest in continuous retraining have a greater chance of survival.