HARTFORD, Conn. – Managed health care provider Aetna Inc. is slashing 6,000 jobs, or 16 percent of its work force, citing lower membership levels and a decrease in the number of markets in which it participates.
Aetna, which employed 37,000 people as of Sept. 30, said that 4,400 people would be laid off, while the other 1,600 jobs will be cut through attrition.
The Hartford company will take a fourth quarter charge of $125 million related to severance and associated facilities costs.
"These actions are necessitated by changes being made as we press forward with our turnaround plan, implement our new strategy, and reduce costs and improve efficiency," said chairman and chief executive John Rowe in a statement Thursday.
"With health membership levels in 2002 expected to decline materially as a result of implementing pricing that is more reflective of projected medical cost trends, as well as previously announced commercial HMO product withdrawals and Medicare market exits in selected markets, we must be sized to match the needs of our business," he said.
Last month, higher medical costs caused Aetna to post a third-quarter loss of $54.4 million.
Aetna is the nation's leading provider of health care and related group benefits, serving 17.5 million health care members, 13.7 million dental members and 11.7 million group insurance customers.
Aetna issued its statement before the stock markets opened. In trading Wednesday on the New York Stock Exchange, shares of Aetna rose 40 cents to $31.04.