This cost-cutting initiative includes the elimination of more than 900 open positions. The approximately 600 associates affected by the layoff will receive both severance pay and outplacement assistance in accordance with WellPoint’s policies. WellPoint anticipates these actions will result in a fourth quarter 2008 after-tax charge of approximately $24 million.
The chief financial officer said that the company is financially strong and the strategy behind reducing operating expenses is to proactively manage business and make adjustments based on market conditions.
Customer service to all members remains a high priority for WellPoint. This adjustment to the size of its workforce does not impact any existing compliance staff involved in its Medicare Advantage or Medicare Part D compliance process, the company said.
Angela Braly, president and CEO of WellPoint, said: With the current state of the economy we made the difficult decision to adjust the size of our workforce as we continue to meet our members’ needs while appropriately controlling operating expenses. We remain committed to providing our members with the high-quality customer service they expect and developing innovative solutions to address the rising costs of healthcare.