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Health Insurer WellPoint to Shed 1,500 Jobs

Posted on 16 Jan 2009

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The second-largest U.S. health insurer, WellPoint Inc., will fire 600 workers and erase 900 open positions to trim costs in “the ongoing economic downturn.” 
The company will book a $24 million after-tax charge in 2008’s fourth quarter to pay severance and outplacement counseling costs, the Indianapolis-based company said today in a statement. The cuts reduce WellPoint’s 42,000-employee workforce by 3.6 percent. 
WellPoint’s ability to enroll new Medicare customers was frozen for at least five months by U.S. officials because it blocked some Medicare customers from receiving prescription medicines and overcharged others, the government said earlier this week. The company also disclosed Jan. 12 it lost $349 million in fourth-quarter investments. WellPoint reports earnings Jan. 28. 
“With the current state of the economy, we made the difficult decision to adjust the size of our workforce,” said Chief Executive Officer Angela Braly in the statement. Chief Financial Officer Wayne DeVeydt said the company has “ample liquidity,” according to the statement.