Cigna to cut 1,100 jobs, citing weak economy
LOS ANGELES (Reuters) - Health insurer Cigna Corp (CI.N) said on Monday it will cut 1,100 jobs, or about 4 percent of its workforce, and consolidate certain operations as it copes with the economic downturn.
As a result, the company said it expects to record after-tax restructuring charges of $30 million to $40 million in the fourth quarter of 2008.
The weakening economy has created challenges for health insurers, including pressure on enrollment as employers cut staffing, investment losses and worries about their balance sheets.
"Given the unprecedented economic situation we and our customers are facing, these actions are essential to ensure we can meet their needs for high value, cost effective products and services," Chairman and Chief Executive H. Edward Hanway said in a statement.
The Cigna news follows a similar announcement last month from No. 3 health insurer Aetna (AET.N), which said it would cut 1,000 jobs, or about 3 percent of its workforce by the end of 2008.
UnitedHealth Group Inc (UNH.N), the largest U.S. health insurer by market value, said in July it was cutting some 4,000 jobs, or about 5 percent of its workforce, over the course of a year.
Cigna said it expects the job cuts to be completed by mid-year 2009.
The company's shares rose 2 percent to close at $18.15 on the New York Stock Exchange before the job cuts were announced.
(Reporting by Deena Beasley; Editing by Phil Berlowitz, Bernard Orr)
