PacifiCare Health Systems Announces Workforce Reduction of 300 Employees

PacifiCare Health Systems, one of the nation's leading managed health care services companies, has announced a workforce reduction of approximately 300 employees, or roughly three percent of its 10,000 employee workforce, due to the elimination of duplicate jobs resulting from its acquisition of FHP, Inc. in 1997 and a need to reduce costs in the highly competitive health care marketplace. The layoffs, effective immediately, will impact employees in 11 states and Guam, with the majority of positions affected in Orange County and outlying service areas statewide in California. The company has assured that all affected employees will receive severance benefits, out-placement assistance, and counseling to aid in their transition.

Key Takeaways:

• PacifiCare Health Systems is reducing its workforce by approximately 300 employees, or 3% of its 10,000 employee workforce, across 11 states and Guam, due to the elimination of duplicate jobs and cost reduction efforts.
• The layoffs will impact employees in California, with approximately 74 employees affected, representing about 1% of more than 5,700 employees in California.
• The majority of positions affected in California will be in Orange County and outlying service areas.
• Other business units, such as Great States Insurance Company of Santa Ana, will also undergo layoffs due to declining market conditions.
• PacifiCare will lay off 35 employees at Great States due to its planned exit from the California workers compensation insurance market.
• The company has assured that all affected employees will receive severance benefits, out-placement assistance, and counseling to aid in their transition.
• The workforce reduction is a result of the company's ongoing effort to streamline functions and reduce costs in the highly competitive health care marketplace.
• PacifiCare's primary operations include managed care products for employer groups, Medicare and Medicaid beneficiaries, serving approximately 3.8 million members.

Statistics:

• 300: The approximate number of employees being laid off by PacifiCare Health Systems, representing 3% of its 10,000 employee workforce.
• 74: The number of employees affected in California, representing about 1% of more than 5,700 employees.
• 35: The number of employees being laid off at Great States Insurance Company of Santa Ana.
• 11: The number of states and Guam where the workforce reduction will impact employees.
• 10,000: The total employee count of PacifiCare Health Systems before the workforce reduction.
• 5,700: The number of employees in California working for PacifiCare.
• 3.8 million: The approximate number of members served by PacifiCare's managed care operations.

Sources:

• PRNewswire, "PacifiCare Health Systems Announces Workforce Reduction of 300 Employees," January 5, 1998.
• PacifiCare Health Systems, Inc., news release, January 5, 1998.