Hartford-based Aetna notified affected employees Wednesday and said the job cuts will "align administrative expenses with the company's growth outlook for 2009 and redirect resources to areas with a greater potential for future growth."
The group health and life insurer has about 7,850 employees in Connecticut, excluding part-timers.
Details couldn't be obtained on how the 375 Connecticut layoffs will be split among Aetna's Hartford, Middletown and Windsor offfices.
The 1,000 layoffs represent a little less than 3 percent of the company's 36,208 employees.
"These actions will reduce our operating costs and allow us to manage through the economic downturn from a position of strength," Ronald A. Williams, Aetna's chairman and chief executive, said in a prepared statement. "The fundamentals of our business are solid, and we continue to win in the marketplace.
Many insurers have begun layoffs, and most of Aetna's competitors have been projecting enrollment declines for 2009. Aetna expects to add 800,000 members in the first quarter of 2009 but hasn't said whether it expects enrollment to shrink after that.
Employers are laying workers off around the nation, which means fewer members in their health plans.
Employers have also been cutting back on benefits in the plans and shifting more medical costs to employees, which makes it harder for health insurers to grow revenue.
Aetna wouldn't say how much money it will save by reducing staff, but expects to discuss that on its fourth-quarter earnings conference call in early February.
Laid-off employees will continue to receive their salary for nine weeks, and then severance pay will kick in and will be based on years of service to the company, Aetna spokesman Fred Laberge said.
He noted that Aetna, while losing some positions, has added 5,725 new jobs companywide since May 2007. Of those, 1,968 came through acquisitions and 3,758 were created internally.
"We're committed to adding jobs and investing in businesses or geographic locations that offer revenue growth opportunities," Laberge said.
The company will take an after-tax charge of about $35 million to earnings in the fourth quarter to reflect expenses related to layoffs and office consolidations, which will be outside Connecticut.
Aetna said the job cuts, across a wide range of corporate staff and business units, are being done in a way so they don't hurt the company's ability to meet commitments to customers and to grow.
Source : Courant
[tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic slowdown financial collapse world recession global recession layoff job cut]
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