Cost-Cutting Will Trim 280 Positions In State, Including 160 Located In Hartford Operation
October 13, 2006
By KENNETH R. GOSSELIN, Courant Staff Writer
Aetna Inc., the Hartford-based health insurer, said Thursday it is cutting 650 jobs nationwide - 280 in Connecticut - as it seeks to keep costs down, remain competitive and invest in businesses that will foster future growth.
In Connecticut, Aetna will shed 3 percent of its workforce, including about 160 employees who work in Hartford. Aetna now employs about 7,700 in Connecticut, about 150 more than a year ago.
The job cuts, which will begin immediately and continue through the end of the year, will trim about 2 percent of Aetna's workforce nationwide of about 30,000 and will affect all levels of employees, from senior managers to clerical workers.
The layoffs announced Thursday were the largest to hit Aetna's Connecticut workers since 2002, but they didn't cut nearly as deeply. In 2002, Aetna announced nationwide cuts that sliced 1,000 jobs in Connecticut.
Thursday's announcement comes three months after Aetna lowered its forecast for membership gains and projected that costs for treating insured patients would be higher in 2006 than it had estimated.
Aetna Thursday declined a request for an interview with Chairman and Chief Executive Ronald A. Williams.
But a spokesman said the layoffs don't contradict the growth strategy that the insurer has been pursuing since recovering from an ill-fated mega-acquisition binge in the late 1990s.
Aetna spokesman David W. Carter said keeping expenses low helps shift investment to profitable new businesses and successful established ones. Lowering personnel expenses also keeps Aetna competitive with other insurers and makes products and services more affordable to customers, Carter said.
In recent years, Aetna has kept its purchases smaller, allowing the insurer to enter new niche markets and expand its geographic footprint.
"As we went through a very rigorous planning process for 2007, we identified additional opportunities to streamline the management structure and reduce administrative costs," Carter said.
The job cuts also aren't changing Aetna's plans to bring 3,600 workers to Hartford from its Middletown office by 2010 as part of a $219 million renovation and consolidation project, Carter said.
The project is expected to include the construction of a new nine-level parking garage on Flower Street and renovations to Aetna's Hartford campus.
The layoffs will result in a $20 million after-tax charge in the fourth quarter. Aetna did not disclose how much expenses would be reduced after the layoffs are completed.
All employees losing their jobs are guaranteed at least nine weeks of pay.
There is additional severance for employees with four or more years of service that extends beyond the nine weeks. That severance is based on years of service and level of pay, with a maximum of 43 weeks.
Reprinted with permission of the Hartford Courant.
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