PACIFICARE: Will Cut 450 Jobs Nationwide, Up to 150 in California
Santa Ana-based PacifiCare Health Systems, Inc. announced Wednesday that it will lay off 250 employees and attrit 200 positions over the next year in an effort to "cut costs and improve efficiency," the Los Angeles Times reports. Company spokesperson Lisa Boyette said that 120 to 150 jobs will be lost in its California operations. The cost-cutting initiative is the latest "example of turmoil" at the financially troubled HMO, which also said it would take a $7 million to $8 million restructuring charge during the first quarter (Bernstein/Hernandez, 1/13). According to PacifiCare President and CEO Alan Hoops, the reductions "are part of [the HMO's] continuous process of evaluating [its] business to determine the functions needed to support the company's growth strategies." He said, "By gaining additional efficiencies and further reducing our costs, we believe we will be able to ensure affordable health coverage and fund the development of new growth opportunities" (PacifiCare release, 1/12). The total job reductions represent about 5% of the company's entire work force. As the company consolidates many corporate and regional functions, primarily dealing with its sales and marketing and human resources departments, 90 employees will receive pink slips immediately and the others will be phased out over the year. In an effort to "soothe" worried shareholders, executives also promised a 15% increase in earnings per share by the end of the fiscal year in December (Crabtree, Orange County Register, 1/13).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.