Health care giant Aetna announces plans to slash 6,000 jobs through layoffs, attrition
Thursday, December 13th 2001, 12:00 am
By: News On 6
HARTFORD, Conn. (AP) _ Health insurer Aetna Inc. has announced plans to slash 6,000 jobs, or 16 percent of its work force, saying it did not need as many employees given lower membership levels.
Aetna, which employed 37,000 people as of Sept. 30, said that 4,400 people would be laid off, while the other 1,600 jobs will be cut through attrition.
``These actions are necessitated by changes being made as we press forward with our turnaround plan, implement our new strategy, and reduce costs and improve efficiency,'' chairman and chief executive John Rowe said in a statement Thursday.
Last month, Aetna posted a third-quarter loss of $54.4 million. At the time, Rowe said that the company had been successful in reducing administrative expenses but was being hurt by climbing medical costs.
The Hartford company will take a fourth-quarter charge of $125 million to cover costs related to the job cuts, including severance payments.
Aetna is the nation's leading provider of health care and related group benefits, serving 17.5 million health care members, 13.7 million dental members and 11.7 million customers with group insurance, which can include life, disability and long-term care insurance.
That's down from its totals a year ago, when Aetna had more than 19 million health insurance customers, 14.5 million dental insurance customers and 11.4 million group insurance customers.
In December 2000, Aetna announced plans to slash 5,000 jobs as it withdrew from Medicare coverage and ended some HMO offerings. Those cuts were unveiled a week after the company completed the sale of its financial services and international businesses to ING Group Inc.