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UnitedHealth To Cut Jobs: Employees Fear That 20 Layoffs Are Just The Beginning
(Hartford Courant, The (CT) (KRT) Via Acquire Media NewsEdge) Jun. 14--UnitedHealth Group expects to tell about 20 Hartford employees Monday that their jobs will be cut.
The company said no massive layoff is planned, but some local employees are worried the toll will be higher in weeks to come.
The first-quarter financial results of Minnesota-based UnitedHealth disappointed Wall Street and the company's president and chief executive, Stephen J. Hemsley, told the annual shareholders' meeting last week that operating costs will be reduced 5 percent.
Company spokesman Tyler Mason said Friday that UnitedHealth continually looks for administrative efficiencies and staffing changes in Hartford are "the normal course of business for us. There's nothing out of the ordinary happening in Hartford."
The company made about five job cuts last Monday in the city.
UnitedHealth has about 4,000 employees in Connecticut, including some 2,300 in Hartford. The company has about 60 jobs open in the state that it's trying to fill, Mason said, declining to speculate on how many other job cuts there might be in the coming weeks.
UnitedHealth has a responsibility to eliminate duplication and unnecessary administrative costs companywide, to help keep premiums under control for customers, Mason said.
The company has reduced reliance on contracted workers and has already moved some employees out of their old jobs and into positions in UnitedHealth units that are growing. Layoffs are the next plan of action, some employees fear.
"I haven't been able to eat, sleep, nothing," said one local employee who asked not to be identified. Morale in Hartford is "awful," the employee said.
A memo from Hemsley that was distributed companywide Thursday may be fueling employee concern. "Some reduction in staffing from top to bottom, across all levels, and a significant slowdown in hiring as well" will be needed, the memo said.
The memo, like UnitedHealth's first-quarter earnings report, cited larger-than-expected declines in the company's commercial risk business, regular employer-based health insurance in which UnitedHealth assumes full financial risk for claims.
The memo noted the company ramped up spending for certain growth opportunities that haven't yet fully materialized and now costs are out of sync with expected revenue. UnitedHealth is "paring back operating costs by 5 percent or more to meet revised revenue levels and we are reducing capital spending," the memo noted.
Contact Diane Levick at dlevick@courant.com.
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