Healthcare management firm Molina Medical Management, Inc., a a subsidiary of Molina Healthcare, Inc. (NYSE:MOH), has announced several layoffs across California in 2018. According to Worker Adjustment and Retraining Notification (WARN) report summary, the Molina Healthcare layoffs for 2018’s beginning will involve permanent layoff of about 292 employees, effective February 23, 2018. The locations affected are Wilmington (11 laid off), Compton (14), Morena Valley (35), Long Beach (52) Ontario (85), and Sacramento (95).
Molina Healthcare Reported Loss of $512.0 Million in 2017
For 2017, Molina Healthcare reported a loss of $512.0 million. It subsequently replaced its top executives and laid off around 1,400 employees as a cost-cutting measure. This included layoffs of Long Beach employees and a halt to the managing of 17 California clinics. These clinics were taken over by Golden Shore Medical Group–owned by former Molina CEO J.Mario Molina, who was part of the prior layoffs–early this year.
The company credits the factors like its restructuring costs and the federal government’s termination of subsidy payments for the losses. In its recently released preliminary guidance for 2018, the company predicted a profit between $202.0 million and $236.0 million, as well as $17.5 billion in premium revenue.
“Our fourth quarter results are emblematic of the significant transition Molina is undertaking,” said Joe Zubretsky, current CEO of Molina Healthcare. “The disappointment of contract losses and related goodwill charges, continued restructuring costs and catch-up adjustments to unacceptable marketplace results are legacies of the past.”
When it comes to Molina Healthcare losses in 2017, the company reported a loss of $512.0 million last year, compared to a gain of $52.0 million the prior year. Specifically, it noted a loss of $97.0 million in the third quarter of 2017 and $262.0 million in the fourth quarter, compared with the loss of $47.0 million in Q4 of the prior year. However, Molina Healthcare’s quarterly revenue for Q4 rose to $4.7 billion from $4.2 billion.
Total premium revenue for 2017 reached $18.85 billion from 2016’s $16.5 billion. For the overall year, the company reported impairment losses of $470.0 million and restructuring and separation costs of $234.0 million. It also lost $73.0 million due to Washington cancelling cost-sharing subsidies
- For Quarter four, the company reported following losses:
– Impairment losses, restructuring and separation costs, and loss on debt extinguishment: $356.0 million
– Loss due to increased medical care costs after the end of cost-sharing reduction subsidies for low-income enrollees in Affordable Care Act health plans: $53.0 million
“WARN notice,” State of California Employment Development Department, last accessed February 13, 2018.
“Company Overview of Molina Medical Management, Inc. ,” Bloomberg, last accessed February 13, 2018.
“Molina Healthcare reports $512-million loss for 2017,” Daily Breeze, February 12, 2018.
“Fourth-Quarter Results Contribute to Molina Health’s $500M Loss in 2017,” Los Angeles Business Journal, February 12, 2018.