Outplacement Offered as Aetna Cuts Jobs
One insurance company is planning to eliminate more than 1,000 positions, including more than 100 Connecticut jobs, and will offer outplacement from an unnamed company to those employees.
Aetna recently announced that it will layoff about 1,250 workers by the end of Q1 2010, a move that will result in the loss of 160 positions in Connecticut. The company plans to layoff 625 employees now and the rest by the end of Q1 2010.
Company officials say the cuts are a result of declining enrollments caused by the economic downturn, as well as the threat of healthcare reform and regulatory changes being proposed by the federal government. Employees who are eligible will receive severance benefits based on length of service, outplacement services and other support programs.
"Streamlining our business now will enable us to improve our competitiveness and redirect resources to areas with a greater potential for future growth," Ronald A. Williams, chairman and CEO of Aetna, told the Hartford Business Journal Online. "Change is never easy but, working from a position of strength, we should be able to manage through the evolving environment."
The company currently employs about 35,500 workers, including more than 7,000 workers in Connecticut. Aetna expects to face a $40 million restructuring charge after tax because of the layoffs and ongoing real estate consolidation.
The decision to make layoffs, company officials said, is designed to ensure Aetna's ability to meet its service and quality commitments to customers, members and other constituents. In addition to reducing its workforce, the company also expects to consolidate field offices in some locations to reduce real estate costs. However, Aetna is not planning to leave any markets as a result.
Cutting jobs is a new trend for Aetna, as the company added 5,700 positions from March 2007 to September 2008, but that was prior to the current economic recession. Now, the company is mostly worried that insurance market reform will put pressure on Aetna's profit margins.