Humana Inc. says it began cutting jobs in the third quarter.
The Louisville, Kentucky-based company says it accepted early-retirement offers from about 1,100 employees, eliminated a few hundred open positions, and started the process of laying off about 1,300 workers.
Humana made the cuts as it was pulling away from the individual major medical insurance market and the Affordable Care Act public exchange system.
But Bruce Broussard, Humana’s chief executive officer, said during a conference call with securities analysts that the company made the jobs mainly to improve the company’s productivity.
“It’s really to create capacity, both to be competitive from a benefit design point of view and to invest in the business for long-term competitive positioning,” Broussard said.
Humana needs money to do things link expanding care management efforts, Broussard said.
(Related: Humana Completes $1 Billion Note Offering)
Even as Humana was cutting some jobs, it was seeking candidates for about 1,450 open positions, including hundreds related to efforts to prepare for an upcoming expansion of the company’s Tricare administration contract.
Tricare is a health benefits program that covers the cost of care for military retirees, military dependents and active-duty military personnel away from military and veterans health care facilities. Humana has been serving as the administrator for the Tricare South Region contract.
Humana is now on track to serve as the administrator of a new Tricare East Region starting Jan. 1. The new Tricare East Region will include both the old Tricare North Region and the old South Region.
Humana executives held the analyst call mainly to go over third-quarter earnings.