USAA Restructures Units and Overhauls Management Team Under New CEO

USAA’ ‘s headquarters in San Antonio. (Courtesy USAA)

USAA, the Texas-based financial services firm that caters to military members and their families, is restructuring its business and revamping top leadership as its recently installed chief executive makes his mark.

The banking and insurance company is forming new internal units, making a series of changes to executive leadership, shifting reporting lines, and laying off staff. It is part of an effort to better provide what USAA refers to internally as “member value,” serving its community of 14 million active and retired military members and their families.

USAA’s chief transformation officer, chief information officer, chief strategy and brand officer, and the head of the life insurance division are leaving, according to an internal memo reviewed by Barron’s.

“To deliver on the promises we make to our membership, we restructured some areas of USAA, most notably adding a Member Value organization, primarily led by military veterans, to ensure everything we do begins and ends with the member in mind,” a USAA spokesman said.

The spokesman added: “We have a deep bench of highly qualified senior leaders who drive USAA’s legacy of exceptional service. In some cases, we have asked leaders to shift to a new area. In a few cases, senior leaders have departed USAA for new opportunities.”

Juan Andrade took the role of CEO in April. Photo: Business Wire

The firm has made cuts to its 37,000-person workforce. While it was unclear how many employees have been affected by layoffs this year, people with knowledge of the cuts said some two dozen middle managers have been laid off. The spokesman declined to comment on the layoffs.

The firm had recently hired Boston Consulting Group to help review its business, people familiar with the matter said. The changes to structure and leadership have some employees feeling on edge.

Among the changes USAA Chief Executive Officer Juan Andrade outlined in an email to employees Tuesday: restructuring the technology organization, creating an executive leadership team that replaces an earlier management structure, and establishing the Member Value group, reporting to the CEO, dedicated to better serving USAA members.

USAA’s marketing and communications teams will also start to report to Andrade, while an executive who joined the firm last year after a 33-year military career will take on new responsibility for the firm’s advocacy work on public policy issues, the memo said.

The San Antonio Express-News reported details from the memo on Wednesday. Andrade wrote that the changes are aimed at simplifying how USAA works, “clarifying accountability, reducing friction and complexity, and increasing our speed of execution.”

The privately held, San Antonio-based company, founded by a group of 25 U.S. Army officers in 1922 as the United Services Automobile Association, is in a period of transition.

In April, Andrade took over from Wayne Peacock, who had led USAA since 2020 and worked there for nearly four decades. The firm also named a new chief financial officer and chief audit executive last year.

USAA’s leadership team is in the process of fixing internal controls that regulators have flagged as insufficient for several years. The Office of the Comptroller of the Currency issued a cease-and-desist order against the firm’s bank subsidiary, USAA Federal Savings Bank, last December, saying it didn’t comply with consent orders from 2022 and 2019.

Regulators ordered USAA to improve how it manages risk broadly, and imposed limitations on offering new products and services. The firm said at the time that it continued “to identify and resolve issues while strengthening the rigor of our programs and processes.”

In 2024, USAA generated $3.9 billion of profit on $48.6 billion of revenue. Its net income was up threefold from a year earlier, while revenue was up 14% in the same time, according to the company’s annual report.

Write to Rebecca Ungarino at rebecca.ungarino@barrons.com