Humana Inc. (NYSE: HUM) — the payer-provider hybrid that has become a major player in the in-home care space — plans to cut its workforce by about 2%.
Louisville, Kentucky-based Humana maintains about 41,600 employees nationwide, meaning a 2% cut would impact slightly more than 800 people.
Humana leadership announced the layoffs in a message to employees on Monday.
“Humana announced a series of measures scheduled for 2020 and beyond aimed at improving productivity and positioning the company for long-term, sustainable success,” a company spokesperson told Home Health Care News in an email. “These measures are in alignment with broader efforts started earlier this year to evaluate the work and cost structure of the organization.”
Humana is scheduled to hold its third-quarter earnings call on Nov. 5, at which point the public will likely learn more about the layoff plans.
Last July, Humana and two private equity firms — Welsh, Carson, Anderson & Stowe plus TPG Capital — completed an acquisition of Kindred Healthcare for about $4.1 billion. Kindred at Home was separated under terms of the deal, with Humana owning a 40% stake.
Humana and the same two PE groups finalized a $1.4 billion acquisition of hospice provider Curo Health Services the same month, with strategic plans to merge the businesses with Kindred at Home.
Since then, Humana has been working to integrate the acquisitions and realign its existing in-home care infrastructure, which included Humana At Home.
While it isn’t entirely clear how cuts would affect Humana’s home care operations, the insurer remains committed to that key aspect of the company moving forward, according to the spokesperson.
“Home care supports our health-focused strategy, and we’re creating new jobs to support that,” the spokesperson said. “The positions we are phasing out no longer align with our business operating model.”
Humana Chief Medical Officer Dr. William Shrank discussed Humana’s home care plans with HHCN in October.
“I think there are a variety of trends that are all intersecting and increasing our interest in being more supportive in the home,” Shrank said. “We’re increasingly thinking about whole-person health and how to manage not only the physical health issues or the behavioral health of our members but how to couch it within the social context in which they live.”
Humana told HHCN it will seek transparency with employees whose positions are being eliminated moving forward. Additionally, some of those employees may ultimately transition to other roles within Humana.
Currently, the insurer has more than 2,000 open positions across the U.S., according to the spokesperson.
Humana announced an even larger round of cuts two years ago.
At the time, those cuts were linked to a costly, non-deductible health insurance fee (HIF) the company was forced to pay.
The HIF is set to return in 2020.
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