Blue Cross to lay off 1,000

Blue Cross Blue Shield of Michigan announced major cutbacks today, including a workforce reduction of nearly 1,000 employees by the year's end, cutbacks to executive pay and compensation, and a reduction in discretionary spending by 25 percent, the nonprofit health insurer confirmed in a press release this morning.

The state's largest insurer will also seek to raise rates across all of its individual lines of insurance, which combined cover about 300,000 Michigan residents.

Blue Cross officials said the cuts are intended to help preserve the organization's financial stability and offset losses incurred on its individual line of insurance -- policies bought by people who aren't covered by their employers. Those losses could exceed $1 billion combined over the next three years, Blue Cross said.

Employees were notified of the downsizing this morning in a video message sent by Blue Cross CEO Daniel Loepp.

"We should not ask our individual subscribers to pay more, without first demanding sacrifices from ourselves," Loepp told employees in the webcast this morning.

The first round of job cuts will take place over the next 60 days with the goal of reducing the workforce by 400 jobs. Blue Cross then plans to layoff another 600 workers by year's end. The job cuts will affect the parent company and Blue Care Network only and will include both salaried and bargaining employees with a goal of a 5 percent reduction in positions across all divisions.

Blue Cross will also ask the United Auto Workers for a deferral of the 3 percent increase in pay for bargaining unit employees recently negotiated in their last labor agreement.

Along with pay cuts, the insurer is also reducing its advertising and lobbying spending by 25 percent.

And it will seek to raise rates on three types of self-insured policies -- a 55 percent increase for individual plans, 42 percent for group conversion and 32 percent for Medicare Supplemental plans.

The cutbacks were precipitated by the state legislature's failure to act on a bill package that could have helped Blue Cross stem losses incurred in the individual market, Blue Cross said.

Blue Cross had spent nearly two years pushing the state to change rules restricting what it charges for individual health insurance coverage, but there was no compromise between House-passed and Senate-passed versions of the bills.

Lobbying had been intense on both sides, with the legislation's opponents, including Attorney General Mike Cox, saying it's a power grab by the Blues that would hurt consumers.

The job cuts follow those made in October when Blue Cross laid off about 100 workers from its Metro Detroit offices, including the nonprofit's headquarters in downtown. The positions included both union jobs and salaried jobs.

Source : DetNews
[tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic slowdown financial collapse world recession global recession layoff job cut]

Aetna To Lay Off 1,000

Aetna Inc. is laying off 1,000 employees companywide, including 375 in Connecticut -- about 5 percent of its work force here -- to protect profits in a declining economy.

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]

Swiss Re to cut 200 jobs

Swiss Re the world's second-biggest reinsurer, is set to cut around 200 jobs, Swiss daily paper Cash reported on Monday, citing sources.

Cash said Swiss Re confirmed it would make 80 redundancies in IT and 40 in its Financial Markets segment, but did not confirm it would make around 100 job cuts in Client Markets and Products.

"Swiss Re is not planning any wide-ranging, systematic job cuts," Cash quoted Swiss Re spokeswoman Simone Lauper as saying.

Swiss Re was not immediately available for comment.

Source : Reuters
[tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic slowdown financial collapse world recession global recession layoff job cut]