Aetna has been doing better than many competitors, but it told employees Wednesday that some job cuts are likely as the company acts to protect its competitive edge in a deteriorating economy.
"We will pursue all appropriate options to reduce costs, including selective reductions in staff," Ronald A. Williams, chairman and chief executive, told employees in an update posted on Aetna's intranet.
The Hartford-based company wouldn't say how many jobs might be cut, where, or when. Aetna, one of the nation's largest health insurers, had 7,487 Connecticut employees as of Sept. 30 and 36,139 companywide.
Some employees are speculating that Aetna may lay off hundreds of people, but company spokesman Fred Laberge cautioned that no numbers have been determined yet.
Aetna has added about 815,000 members so far this year and ended September with 17.7 million but said last month it expects enrollment and earnings to grow more slowly in 2009. The company will also have significantly higher pension plan expenses because of investment losses in the plan.
"The bottom line is that most U.S. businesses anticipate a major economic slowdown in 2009 and are taking steps to streamline their organizations and cut costs," Williams said Wednesday. "We must do the same."
Health insurers are affected by customers' cutbacks in staffing and slowdown in hiring, and it gets tougher to add enrollment in a recession. CIGNA has forecast a 1 percent decline in its membership in 2009, excluding an acquisition this year.
Williams said Aetna is "operating from a position of strength, so any staff reductions will be targeted to ensure that we do not impair our ability to meet our customer commitments and growth targets."
Aetna is revising its 2009 operating plan to reflect the economic turmoil, and Williams said company leaders expect to work toward decisions quickly.
Meanwhile, Aetna is restricting new hiring, cutting out unnecessary travel and reviewing what it spends on outside consultants and professional memberships, Laberge said.
Aetna's net profit fell 44 percent to $277 million for the third quarter, largely from investment losses.
Reprinted with permission of the Hartford Courant.
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