Centene drops 6,000 employees as health insurance profits bounce back
Centene cut 6,000 jobs to boost profits.
The short version
- The giant health insurer posted $50.6 billion in revenue.
- Staffing cuts cost $280 million in severance.
- Medicare plans drove the profit recovery ahead of schedule.
Why it matters to you. For business owners and families paying for private health coverage, insurance companies trimming overhead and stabilizing Medicare losses could signal steadier premium hikes ahead.
Centene, the health insurance giant based in St. Louis, Missouri, just dropped 6,000 employees in a single quarter as part of a massive profit recovery push. The company shed nearly 6,000 workers through layoffs and voluntary exits, driving its total headcount down from 59,800 to 53,900.
Those staffing cuts saddled the insurer with almost $280 million in severance expenses during the quarter, according to Yahoo Finance. But the pain is working, as Centene reported quarterly revenue of $50.6 billion, up 2% from last year and beating Wall Street expectations.
The company also shrank its net loss to $71 million, a steep improvement from the $6.6 billion loss recorded in the same period last year. Medicare plans proved to be the star of the quarter, with seniors using fewer medical services than expected.
Centene now expects its Medicare business to break even this year, hitting a target it previously did not expect to reach until 2027. Higher reimbursement rates from states and higher premiums on Affordable Care Act health plans also helped boost the bottom line.
CFO Drew Asher told analysts it was another very good quarter on the path to margin restoration.
