Updated at 3:50 p.m. with stock price, information from internal emails
Multiple sources have told Insider that Humana is cutting jobs.
A Humana spokesman told Insider that the steps are part of a realignment and that employment in Louisville would remain at 12,500.
Company emails obtained by Insider also announce some segment leadership changes that include the departure of a vice president.
One source told Insider that Humana began “major layoffs” on Tuesday, while another said that the action is affecting primarily middle management ranks.
A third source said that the cuts exceed 120 and are affecting divisions including finance.
“Seems to be double digits in a lot of different areas,” the source said. “They’re doing it under the radar.”
In an email dated March 1, CEO Bruce Broussard announced some high-level leadership changes.
“We are in an industry that is undergoing tremendous change, which requires us to continuously evolve, grow and innovate,” Broussard wrote.
In an email sent Tuesday evening, Beth Bierbower, president of Humana’s Group Segment, told that division’s employees about some reorganization, including the departure of the unit’s vice president, Mike Bellissimo, to allow the segment to adapt and evolve more effectively.
The Group Segment is one of Humana’s three main business units and includes insurance benefits for employers, the military service business and health and wellness products. It employs about 6,000 and last year generated revenue of about $7.25 billion.
Bierbower wrote that the centralization of some activities was “resulting in realignment of some roles and responsibilities to our team and to other areas of the enterprise.”
She also said that the unit:
- consolidated some leadership roles
- reduced “organizational layers in certain areas”
- created efficiencies “by eliminating duplications”
- And introduced measures “to significantly reduce costs and control of our administrative expenses.”
Part of those efforts included merging the wellness and go365 teams into the Well-being Solutions organization.
“Change is always challenging,” Bierbower wrote, “but our organization has the opportunity and the obligation to adapt to evolving business priorities. This means several roles on our team will no longer be necessary.”
Tom Noland, a spokesman for the Louisville-based insurer, told Insider via email that Humana is constantly assessing its workforce needs and will “continue to create new jobs that are aligned with the company’s enhanced growth strategy as described in our Feb. 14 news release, and to phase out positions that are no longer as aligned.”
Noland has not responded to a follow-up inquiry to tell us how many jobs are affected, what departments/geographic locations are seeing the greatest impact and what share of the people who are affected spent a significant amount of time in the last two years to prepare for the failed merger with rival Aetna.
The $34 billion deal was scuttled after a judge sided with government regulators who said that the merger would materially reduce competition and harm consumers. Humana on Feb. 14 said that it would intensify its focus on people with chronic health conditions, especially the elderly.
At the time, Humana also said that it would increase its dividend, buy back some of its shares and exit the Affordable Care Act exchanges on Jan. 1.
Humana and other major insurers have struggled with patients they have gained through the ACA, also known as Obamacare. The insurers have said that the health care costs from the sicker-than-expected patients have, by far, exceeded the health insurance premiums the companies have collected. That’s in part because younger, healthier patients have declined to sign up for insurance.
Humana posted a $400 million fourth-quarter loss about a month ago.
Humana’s job cuts this week are coming only days after senior executives dumped about $74 million in stock and about a month after the insurer began cutting about 500 positions in its home-based care division.
Noland said that affected employees are given up to 60 days to obtain another position within Humana, “and severance and outplacement assistance if a new position is not secured.”
Humana shares were up 1.25 percent in late-afternoon trading. Broader markets were up about 1.5 percent.