Health insurance giant Cigna to cut 3,000 jobs to reduce operating costs
Friday, February 6th 2004, 12:00 am
By: News On 6
PHILADELPHIA (AP) _ Health insurer Cigna Corp. reported a rise in fourth-quarter profits Friday, but also announced plans to cut about 3,000 jobs, almost 9 percent of its work force.
The Philadelphia-based company said it earned $290 million, or $2.06 per share, compared with net income of $47 million, or 33 cents per share, for the same period last year.
Cigna, which employees about 33,700 workers, said it is aiming to reduce operating expenses by about $300 million in 2004.
It expects nearly 70 percent of the cuts, or roughly 2,100 jobs, to stem from layoffs, and the rest through attrition, spokesman Wendell Potter said. Final decisions have not been made on the types of jobs or locations, but Potter said cuts will range from corporate staff to health-care operations.
``We are keenly focused on further strengthening health-care results and continuing to develop our other businesses,'' Cigna chairman and chief executive officer H. Edward Hanway said.
Earlier this week, a federal judge approved a $540 million settlement under which Cigna will pay to settle claims that it systematically underpaid the nation's 950,000 doctors.
Total membership in Cigna's group health insurance plans was down 11 percent, totaling 11.5 million at the end of last year, the company said.