Posted on 06 Jan 2009
CIGNA announced on Monday that several actions will be taken in response to the economic downturn in order to strengthen the company’s competitive position, including a reduction in its global workforce by approximately 1,100 positions, around 4 percent of the company’s employees, and the planned consolidation of certain real estate locations. As a result of these actions, CIGNA expects to incur approximately $30 - 40 million, after tax, in cost reduction charges 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 job eliminations are anticipated to be in large part complete by mid-year 2009 and all those impacted by these actions will be eligible for severance benefits and outplacement support.