•Aetna to Cut 625 Jobs, Pare Similar Number Next Year as Medical Costs Rise

Discussion in 'Stocks' started by ByLoSellHi, Nov 18, 2009.

  1. http://www.bloomberg.com/apps/news?pid=20601087&sid=aSPZ4DT5QYok&pos=7

    •Aetna to Cut 625 Jobs, Pare Similar Number Next Year as Medical Costs Rise

    Aetna Cutting About 625 Jobs, Will Pare More in 2010 (Update1)
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    By Alex Nussbaum

    Nov. 18 (Bloomberg) -- Aetna Inc., the third-largest U.S. health insurer, said it’s cutting about 625 positions and plans to eliminate a similar amount next year as it copes with the recession and the potential impacts of the U.S. health overhaul.

    The insurer will take a $40 million after-tax charge as a result of today’s cuts and make the next round by the end of first quarter of 2010, the Hartford, Connecticut-based company said in a statement. Aetna also plans to consolidate field offices in some areas to reduce real estate costs, the company said.

    Chief Financial Officer Joseph Zubretsky said last month that Aetna plans to shed more than 600,000 members and raise premiums in 2010 to cope with rising medical prices. In today’s statement, Chief Executive Officer Ronald Williams said the company also needs to prepare for the effects of the health overhaul, which may impose new taxes and create a government-run plan to compete with private insurers.

    “Streamlining our business now will enable us to improve our competitiveness and redirect resources to areas with a greater potential for future growth,” Williams said. “Working from a position of strength, we should be able to manage through the evolving environment.”

    Aetna doesn’t plan to exit any current markets as a result of the cuts, it said. The company has about 35,500 workers.

    Aetna lost 6 cents to $29.21 in New York Stock Exchange composite trading at 4:15 p.m. The shares have risen 2.5 percent this year.

    To contact the reporter on this story: Alex Nussbaum in New York anussbaum1@bloomberg.net.
    Last Updated: November 18, 2009 16:43 EST
  2. Bottom line more people are out of a job.
  3. And in the medical sector, which shows the economy is in truly desperate straits.
  4. I hope we have a government plan some day, so all of these insurance companies go out of business.