Dive Brief:
- Insurer Blue Shield of California confirmed it will lay off 140 employees, or 2% of its workforce, according to a company spokesperson.
- In an emailed statement, the spokesperson attributed the cuts to a need to reduce administrative costs, operate efficiently and ensure “we have the right talent, skills, and capabilities in place.”
- Worker Adjustment and Retraining Notification documents filed with the state stipulated the insurer would lay off 165 employees across seven counties by the end of the month.
Dive Insight:
Employees impacted by this month’s layoffs have been offered the chance to stay on the job for 90 days while job searching and can work with a certified professional career coach during their transition, the company spokesperson said.
Last January, the insurer laid off over 370 California workers, citing a need to manage administrative costs in a difficult economy, according to a statement provided to local news outlet ABC 10.
The nonprofit insurer has recently made headlines for announcing plans to revamp its pharmacy benefits and save money.
In October, Blue Shield revealed a plan to drop CVS Caremark as the sole manager of its pharmacy benefits and contract out the job to five separate companies. The insurer says the plan will save $500 million.
The insurer faced some operational speed bumps in 2022, when Blue Shield was initially passed over during a bidding process to participate in the revamped Medi-Cal marketplace — the largest Medicaid market nationwide. Fitch Ratings described the insurer’s 2022 financial performance as “materially below expectations.”
However, the payer appealed the decision and the state revised its determination, awarding contracts to the payer in January 2023.
Clarification: This article was updated to add comments from Blue Shield of California and reflect workforce reductions filed in California WARN documents.
