Centene to lay off 3,000 employees as part of restructuring initiative

Centene Corp.'s top executive said the managed care company would be undertaking an organizational restructuring initiative that will include laying off 3,000 employees and eliminating 1,500 open positions.

CEO Michael Neidorff during an earnings call said those figures represent a workforce reduction of roughly 6%, which the company views as material. Neidorff added that the reductions are primarily in areas where there is "significant overlap" from acquisitions and where there are opportunities to leverage the company's "size and scale for increased efficiency."

"We remain focused on innovation, growth and agility, and we are continuing to invest in people and systems that align with key areas of growth for the company," he said. "We are transforming our healthcare model and making material advancements in our technology capabilities."

Potential headwinds facing the company include additional state rate actions due to COVID-19-related reductions in utilization, the potential for higher-than-anticipated overall pandemic-related costs and a Medicare physician fee schedule update, Neidorff said.

Tailwinds include continued membership growth as a result of the extension of the Medicaid redetermination suspension and lower utilization trends in the first half beyond the company's current projections.

The reopening of HealthCare.gov for a special, three-month enrollment period starting Feb. 15 is a "positive" for the company, the CEO said. He noted that a lot of the estimated 9 million people who are uninsured will qualify for Medicaid.

Neidorff also expects the marketplace segment to attract more people, but Centene is keen to attract a "good mix" of people, not just the young and healthy.

Centene logged a fourth-quarter 2020 net loss attributable to the company of $12 million, or a loss of 2 cents per share, compared to net earnings of $209 million, or 49 cents per share, a year ago.