Humana Inc (NYSE:HUM) is laying off hundreds of employees as the company looks to trim its workforce while still suffering the effects of the failed merger with health insurance company Aetna Inc (NYSE:AET). These Humana layoffs for 2017 primarily affect the Humana At Home division. While the company has performed well on the stock market, upwards of 700 workers have been shed as a result of the company’s weakening sales and the failed Humana/Aetna merger, which is on temporary hold by a federal court over concerns that the merger would be anti-competitive.
The Humana job cuts made to the workforce extend all across the U.S. The healthcare giant, based out of Louisville, Kentucky, services over 13 million people in the U.S. and employs about 51,600 people.
Humana At Home Announced 500 Job Cuts in February 2017 Due to Drop in Sales
The biggest blow to the health giant this year came by way of 500 job cuts in February that were primarily motivated by weak sales figures. The Humana quarterly losses amounted to $401.0 million in Q4 2016. The losses were a result of challenges that the company is facing in the private Medicare plan market. The drop prompted the company to implement the layoffs in February 2017.
The At Home division is an eight-year-old unit that employs nurses and nurse practitioners alongside support staff and administrators to facilitate Humana customers’ transitions from hospital stays and medical observation to life back at home. The nurses were primarily focused on communicating with customers via telephone to help solve medical issues or other portables.
Multiple reports claimed that Humana said the layoffs were unrelated to the failed Aetna merger.
The job cuts affected two states, with Ohio losing 88 and Florida layoffs accounting for the remainder. Overall, these 500 cuts represent the biggest single group of Humana layoffs in 2017 so far.
Humana’s Announcement of Laying Off Top Position Employees in Kentucky and Wisconsin
Unlike the previously mentioned At Home Humana layoffs in 2017, this round of cuts was directly tied to the failed Aetna merger.
The Humana layoffs in March 2017 were focused on top-level employees, as well as others throughout the company, impacting Kentucky and Wisconsin.
In Brown County, Wisconsin, Humana is the largest private employer with about 3,300 employees, according to Greater Green Bay Chamber employment data from 2016. The cuts are part of a reorganization that is coming about in response to the failed Humana/Aetna merger.
The Wisconsin layoffs are expected to hurt the claims processing employees in De Pere. This represents a multitude of factors contributing to the Humana downsizing in 2017. The company did not release the exact number of employees cut.
Humana At Home Made 180 Additional Job Cuts in August 2017
Cuts for the health insurer kept rolling in 2017, with the Humana At Home job cuts in August 2017 registering an additional 180, on top of the 500 earlier in the year.
The cuts were part of reported “organizational changes” that led to even more layoffs this year.
Of the 180 cuts, 20 were Kentucky layoffs. Employees were reportedly given 60 days notice, a severance of two weeks’ pay for each year of employment, and job placement assistance.
Humana Continues to Trim Workforce as Company Offers Buyouts to Senior Employees
Another edition to our Humana layoffs for 2017 and organizational trimming wrap-up involves Humana buyouts that were offered to senior employees this September.
For workers over 55 who have been at the company at least five years and have a combination of age and employment history with the company that equals to over 65, the buyout program will offer two weeks’ pay pear each year of employment up to a maximum of 52 weeks. The buyouts were offered in September of this year.
The company also announced that it would be withdrawing from the Affordable Care Act (“Obamacare”) and as a result will need to trim its workforce.
The ACC exchange has been heavily in the news recently, as Republicans attempted to repeal the landmark Obama administration healthcare law to no avail. As it stands, the Affordable Care Act is still in place, although Congress and executive orders from President Donald Trump have begun to attempt to whittle away at aspects of the legislation, leading to a bitter divide among both parties as to the future of healthcare in the U.S., with Americans caught in the crossfire.
Humana Layoffs Continue with 1,300 Job Cuts in Early 2018
Most recently, Humana announced that it is laying off 1,300 employees. Another 1,150 are taking voluntary buyouts. Together, the layoffs and buyouts will reduce Humana’s headcount by more than five percent.
The Louisville-based insurance giant said the job cuts will take place in early 2018. The 1,150 employees taking early buyouts will also be leaving in 2018.
Humana has not disclosed a reason for the layoffs and buyouts, but many believe it is because Humana needs to employ fewer workers after the company revealed it is pulling out of the Affordable Care Act.
Back in February, Humana said it would exit Obamacare because it had incurred hundreds of millions of dollars in losses. Losses mounted because the cost of medical care for customers it had gained outstripped the insurance premiums customers paid through Obamacare.
Humana, feeling the financial strain, launched a $600.0-million lawsuit against the federal government in an effort to recover losses related to Obamacare premiums.
The $600.0-million lawsuit and gutting of its workforce does not mean that Humana is suffering, however. In early November, Humana announced that third-quarter net income had increased 10.8% year-over-year to $499.0 million, or $3.44 per share. Excluding one-time items, including costs related to recent job cuts, earnings advanced nearly six percent to $3.39 a share, from $3.20 a share in the year-earlier period.
Looking ahead, though, Humana warned that the subscriber base for its standalone Medicare drug plans would probably decline by “a few hundred thousand members.” To offset these challenges, Humana said it is looking at additional cost-cutting measures, repurchasing shares, and, perhaps, merger-and-acquisition activity.
Humana to lay off 500 workers in Ohio, Florida,” Cincinnati.com, February 8, 2017.
Humana Lays Off 500 Workers in Home Care Unit,” Human Health Care News, February 12, 2017.
De Pere employees included in Humana layoffs,” Green Bay Press-Gazette, March 1, 2017.
Humana to cut unspecified number of jobs, top positions in Kentucky, Wisconsin,” Becker’s Hospital Review, March 2, 2017.
Humana cuts 180 jobs in home-based care division; 20 in Kentucky,” Insider Louisville, August 30, 2017.
Humana to offer buyouts for employees 55 and older,” WHAS 11, September 25, 2017.
Humana job cuts: Buyouts offered to employees,” Good Insurance, September 25, 2017.
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