Aetna Lays Off 1000 Employees

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Aetna Laying Off 1,000, Including About 375 In Connecticut
December 18, 2008
Aetna Inc. is laying off 1,000 employees companywide, including about 375 in Connecticut — nearly 5 percent of its workforce here — to protect profits in a declining economy.

Hartford-based Aetna notified affected employees Wednesday and said the job cuts will "align administrative expenses with the company's growth outlook for 2009 and redirect resources to areas with a greater potential for future growth."

The group health and life insurer has about 7,850 employees in Connecticut, excluding part-timers and including people on maternity or disability leave. A little less than half of the 375 Connecticut layoffs are in Hartford, and most of the rest are in Middletown.

The 1,000 companywide layoffs represent a little less than 3 percent of Aetna's 36,208 employees.


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2008 Layoffs In Connecticut Photos

"These actions will reduce our operating costs and allow us to manage through the economic downturn from a position of strength," Ronald A. Williams, Aetna's chairman and chief executive, said in a prepared statement. "The fundamentals of our business are solid, and we continue to win in the marketplace.

Many insurers have begun layoffs, and most of Aetna's competitors have been projecting enrollment declines for 2009. Aetna expects to add 800,000 members in the first quarter of 2009 but hasn't said whether it expects enrollment to shrink after that.

Employers are laying off workers across the nation, which means fewer members in their health plans. Employers also have been cutting back on benefits in the plans and shifting more medical costs to employees, which makes it harder for health insurers to grow revenue.

Aetna wouldn't say how much money it will save by reducing staff, but it expects to discuss that during its fourth-quarter earnings conference call in early February.

Laid-off employees will continue to receive their salaries for nine weeks, and then severance pay will kick in and will be based on years of service to the company, Aetna spokesman Fred Laberge said.

He noted that Aetna, though losing some positions, has added 5,725 new jobs companywide since May 2007. Of those, more than 1,900 came through acquisitions and nearly 3,760 were created internally.

"We're committed to adding jobs and investing in businesses or geographic locations that offer revenue growth opportunities," Laberge said.

The company will take an after-tax charge of about $35 million to earnings in the fourth quarter to reflect expenses related to layoffs and office consolidations, which will be outside Connecticut.

The job cuts are across a wide range of corporate staff and business units. Aetna said it has tried to do them in a way that doesn't hurt the company's ability to meet commitments to customers and to grow.