Cigna To Lay Off 1,300 Workers, Including 200 In Connecticut; Health Insurer Says This Won’t Affect Deal With State To Grow Employment

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Cigna Corp. is planning to cut its workforce by 4 percent — including 200 layoffs in Connecticut — between now and June 2013, but the health insurer still plans to meet its obligations to grow jobs in exchange for benefits from the state.

The Bloomfield-based health insurance company is planning to cut 1,300 jobs companywide, which started last month with almost 300 in Europe. Others will be spread out in other places where Cigna has major operations.

Some employees have been notified already and others will be notified in the coming months, with all layoffs expected to be complete by June 2013.

Cigna was the first company to take advantage of a state program in July 2011 as Gov. Dannel P. Malloy’s administration tried to spur job growth in the weakest economy since the Great Depression. The program, initially called First Five and now called Next Five, offers state tax credits and other benefits to any company that adds a minimum of 200 jobs and makes an investment of at least $25 million.

Cigna agreed to add 200 workers and spend $100 million in Connecticut in exchange for up to $47 million in benefits from the state. Cigna still will have grown its Connecticut employment base from 3,880 in July 2011 to the required 4,080 by July 2013.

“During this environment, we’re continuing to hire because there are certain skill sets, like certain technologists, certain clinicians, certain other skill sets that we need to add, and we continue to add around the world, as well as here in Connecticut,” Cigna CEO David M. Cordani said in an interview with The Courant.

“We’re isolating this one event, to provide visibility as we should,” Cordani told The Courant. “But both in advance of that time frame, during that time frame and subsequent to that time frame, we continue to hire. So, the headline is: We are a net employment grower here in Connecticut. This one event, which we don’t take lightly, is a disruptive event, and it just net-net decreases the overall rate of growth because we will remove some employees from our overall population.”

Cigna had about 30,000 workers companywide in 2009 and has about 35,000 today, including about 4,000 in Connecticut. A 4 percent reduction would still leave 33,600, which is more than the 30,000 the company had three years ago.

The layoffs were mentioned as a “realignment and efficiency plan,” a foot note in the third-quarter earnings report that came out Thursday morning. The company will take a one-time charge of $50 million after taxes for $39 million in after-tax savings annually starting in 2014.

Cigna didn’t specify exactly which workers will be laid off, though it is generally support staff for the operation. The jobs Cigna intends to add are well-paid professional jobs: clinicians and people in technology.

“These actions will position Cigna to be more competitive and enable the company to invest in programs to make health care delivery more cost effective in all our businesses,” said Cigna spokesman Jon Sandberg. “By investing in our future, the company expects its job base in Connecticut to continue growing in 2013, adding high level professional jobs to support a growing global health leader.”

It’s not the only health insurer to cut jobs recently. Aetna has been cutting workers in recent years, including 160 earlier this fall, of which 80 are in Connecticut. Aetna spokeswoman Cynthia Michener said in early October that layoffs were to make the company a more consumer-centric and efficient operation. Specifically, she said the company needed to reduce expenses as it prepared for public health exchanges, which is an online marketplace for health insurance that was a part of the Affordable Care Act sometimes called Obamacare.

In Cigna’s case, the cost cutting is partly due to “global headwinds,” the company said, referring to economic conditions abroad.

Cigna’s earnings were up 31 percent for the three-month period ending Sept. 30, at $7.36 billion compared with $5.6 billion for the same period a year earlier. Profits were driven, in part, by new business from Cigna’s $3.8 billion acquisition of HealthSpring in January.

Sometimes when companies acquire a competitor, layoffs follow as overlapping positions are eliminated. That is not the case with this round of layoffs, a Cigna official said.

A spokesman for Malloy’s office, Andrew Doba, said, “Any time you hear layoffs, it’s obviously never a good thing. But I think what’s important about Cigna, in particular, is that they moved their corporate headquarters here … which is something that’s not happened in Connecticut in quite a while. … If they are going to be adding more jobs in the future, then this is the natural place they would do that.”   

Connecticut Department of Economic and Community Development Commissioner Catherine Smith responded to the Cigna layoffs news by saying, “We’re always sad and sorry that anyone has to lose their job, I think they (Cigna executives) are too,” she said, but big businesses have to make adjustments as they realize certain divisions aren’t as profitable as others.

While she said that Cigna might end up growing by only 600 jobs over the next 10 years in Connecticut, rather than 800 that was the highest possible projection, she believes there is no danger at all that Cigna will not live up to its commitment to have at least 4,100 jobs in the state when its subsidies are evaluated through the First Five program in July 2013.

Smith said not only is Cigna on target with its hiring goals, it’s also on track to spend more than $100 million on construction and renovation at its Bloomfield campus.

“All those things are beneficial to the state,” she said. “The deals that we’re making they aren’t meant to be evaluated week by week day by day, they are long-term pluses for the state economy.”

She said while she’d rather the news from the state-supported companies only be of growth, she said that First Five is doing what it’s supposed to do.

Hartford Courant Staff Writer Mara Lee contributed to this report.

About Matthew Sturdevant

Full-time staff journalist at The Hartford Courant and magazine freelancer with a master's degree in writing from Dartmouth. My work has appeared in The Los Angeles Times, The Chicago Tribune, Taiwan News, The Baltimore Sun and many other news sources. My blog has been referenced by Politico.com, the Kaiser Family Foundation, the Georgetown Law Library and a number of organizations in healthcare and business. Sturdevant’s blog is "a well-written wealth of ideas," said The Donald W. Reynolds National Center for Business Journalism, (businessjournalism.org, May 18, 2011). I have experience writing for newspapers, magazines, Web sites and blogs as well as shooting and editing video. I made regular appearances on news-talk radio and on the NBC affiliate station in Corpus Christi, Texas. I made occasional appearances on the Fox affiliate in Connecticut promoting Hartford Courant articles.

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41 thoughts on “Cigna To Lay Off 1,300 Workers, Including 200 In Connecticut; Health Insurer Says This Won’t Affect Deal With State To Grow Employment

  1. Seriously?

    And you know who they hired as part of the First Five program? Their 200 “employees?” Not full time office workers. Grounds and maintenance “contractors.” To help fix up the Bloomfield building surroundings including new walkways, lots, plantings, etc. And now that the project is done, they’re out of work again. Total nonsense!!!

  2. kathy

    Why then are the jobs being shipped over to India, and they are coming here and taking our jobs????Answer that Cigna and Gov. Malloy.

    1. mike

      Sorry punkin, the jobs are going to South Carolina and South Dakota. You want to live in South Carolina? I do. I’ll happily trade places and live in a state with people who have teeth, can read, and aren’t shoving a Bible in your face every time you go outside.

        1. H

          My Mom works for Cigna in Colorado and her supervisors have been traveling to India for months now training them to take over jobs like my moms. So don’t be so sure, Punkin.
          What a joke…

  3. OldGrunt

    Fear this is just the beginning. For Pete’s sake folks, the best predictor of future performance is PAST PERFORMANCE!

    Do you want four more years of this? His answer is to create a “SECRETARY OF BUSINESS”! What did he do with his SECRETARY OF COMMERCE for the past four years? Why didn’t he attend any of his own Job Counsel meetings?? Obama is great in developing ILLUSIONS TO PROGRESS!

    The United States ranked just 12th in the recently released Legatum Institute’s annual prosperity index—marking the first time the country has fallen outside the 10 most prosperous nations.
    One striking difference between the United States and the countries identified as more prosperous is that of the corporate income tax rate.
    Earlier this year, the United States achieved the dubious honor of having the highest corporate income taxes in the world (39.2 percent). Experts argue the high rate has a detrimental impact on economic growth.
    Compare that to the corporate rates of countries ranked ahead of the United States:
    1. Norway (28 percent)
    2. Denmark (25 percent)
    3. Sweden (26.3 percent)
    4. Australia (30 percent)
    5. New Zealand (28 percent)
    6. Canada (26.1 percent)
    7. Finland (24.5 percent)
    8. Netherlands (25 percent)
    9. Switzerland (22 percent)
    10. Ireland (12.5 percent)
    11. Luxembourg (21 percent)
    12. United States (39.2 percent)

    1. mike

      Gasp…every country on that list with lower corporate tax rates is called “Socialist” by Tbagrs and the right wing media machine. The difference? In other countries, the trust fund babies like Mitt pay their fair share and aren’t given loop holes to pay 14% while working people making $50K a year are paying 25%.

    2. Barbara

      It’s one thing to have a corporate tax rate but if that’s offset by loopholes and profitable companies get rebates, that’s another.

  4. DaTroof

    Connecticut is open for business! Danny boy told us so!

    Hoping and Changing our way to oblivion- one liberal at a time.

    1. admiralbrown

      Dannel, his name is Dannel. I’m still trying to figure out what happened to Dan Malloy who won the 2010 election and promised GAP accounting. Somehow we got this Dannel guy running the show instead.

    2. mike

      I’m sorry, Connecticut was run by Republicant governors for how many years? 16. SIXTEEN. Your problems didn’t suddenly pop up in the past year and a half.

      1. Caroline

        Actually, I believe this is the first time that a Connecticut governor has just handed out free taxpayer money to businesses as part of “job growth” plan. Connecticut has a 60 million dollar budget shortfall right now, and that is after the biggest tax hike in Connecticut history, and Malloy hands out millions to huge businesses like Cigna that report record profits. Unfortunately, Cigna just shafted the State of Connecticut, and because of Malloy’s stupidity, we all suffer because of it. But, I guess we better get used to things like this because, rest assured, these same suffering Connecticut taxpayers will continue to vote demo-rat each election.

      2. DaTroof

        Lets talk about the here and now Mike. Unbalanced one party rule, $1.6B tax increases, corporate welfare, balancing budgets with more debt, and cowtowing to the State’s biggest employer, State Government, is no recipe for growth and success. We’re turning into California and its unsustainable. Get real.

  5. mike

    Most corporations have Mitt Romney and the GOP in their back pocket. Human beings do matter to them.

    1. Trey

      I am done with the liberal left constantly complaining about the corporations being in the back pocket of the GOP/Republicans. That is just not true! It really flows both ways! Look at the first five program of good ol Dannel, or go look at which of the big banks got bailouts and where there 2008 presidential campaign contributions went to, hmmmm! Also, lets talk about taxes! Who raises taxes on the middle class? All I hear is “Oh watch out, mean ol Mitt’s gonna raise taxes on the middle class”! Again, look at the democrats in this state, most notably Dannel, largest tax hike in the history of this state and it affected everyone most importantly the middle class! So who really raises taxes?

      1. aruba19

        Politicians raise taxes and it doesn’t much matter which side of the aisle they’re on. Greed favors no party over another.

  6. Rob

    Just absurd, but did anyone expect Cigna to live up to its commitment, or for the state to enforce it? But then again what has Dannel done right?

    1. aruba19

      Cigna’s CEO owns a 13 million dollar home on the Jersey shore. Thanks to Sandy, for all we know he’s already IN India. :-)

  7. Vern

    If Malloy gives CIGNA another $47 million, it will not let those 200 CT employees go. Sounds like a plan to me and he will do it!

  8. wbrukie

    will grow employment by laying off workers – hmmm, great plan.

    like obama’s: will cut the deficit by spending. wonder if my creditors will buy that plan from me.

  9. Gregg 3 Gs

    That is totally ridiculous! They get all sorts of plums for hiring 200 new people, but they go and lay off 1,300. This is no different from simply laying off 1,100 people! But companies don’t get accolades for simply laying off over a thousand employees, so instead they hire 200 and lay off 1,300 so they can (maybe technically truthfully) say they created 200 new jobs.

    Health insurance companies are total thieves. That’s why I got rid of my health insurance: I got sick of paying premiums and then having the stupid health insurance companies deny my claims and put me through the wringer just to get paid. I’ll be damned if I’m going to pay for insurance and still get stuck paying the bill myself, yet that is what would happen to me because they would find ways to weasel out of paying.

  10. bruiser

    Why don’t you call this what it is: a complete scam and sham and crony capitalism at its worst. But it’s hardly surprising with all the fancy maneuvering that Malloy has done since he became governor. Then again, he wouldn’t be governor if it wasn’t for the shady doings in Bridgeport on election night. And now I hear Al Sharpton is coming to Bridgeport to encourage voting? Now there’s a sorry daily double: Malloy-Sharpton.

  11. R Lee

    Isn’t it great theta Gov Malloy gave all this money for jobs and now they are firing people.
    Why didn’t the State give the $47 million to the workers and let them use it instead of CIGNA who will be out of here shortly?

  12. joe867

    Sure, it’s a great deal for Cigna. Layoff high paid workers, and hire 200 low paid part time employees. Work the numbers, and take advantage of Malloys money plan. LOL

  13. aruba19

    Would sort of like to know how eliminating jobs is “growing” jobs. As to state benefits to Cigna, it would be great if the state treats them like they treat their customers. Cut off benefits without warning and no legit reason.

  14. Dwight

    This governor and Democratic lawmakers are giving away money like candy to these organizations that promise jobs, but never deliver. Until we change who we send to Hartford, nothing will change. Put some Republicans and independents in office. Please stop buying the Democratic Party’s BS.

  15. admiralbrown

    Wow, quite the deal, Cigna spends $100 million to update its campus and gets $47 million in tax breaks from the state. As for the 200 jobs, they could hire 200 people at $10 an hour to sit in an auditorium for eight hours a day and the labor costs would be $4 million a year.

  16. tony e

    How disgusting! How do you justify layoffs for 1300 people when you just posted a $7 billion dollar profit for last quarter!Absolutely shameful and disgusting!! How does management sleep at night!!!!!!

  17. FreeSpeech

    (The last post should be on top – not at the bottom.
    Cigna is just another perfect example of TOTAL corporate greed!
    I know someone who works there (in a technical field); very hard worker and had some health problems last year (go figure) and this POS health insurance company laid them off even after Gov. Malloy gave THEM 46 million! What hypocracy! What Inhumanity those greedy @#$#@ have done!!! Even after doubling profits of the backs of the people of CT and even after a rise in membership! This is not lean this is thoughtless, greedy corporate bean counting PIGs at work!!!

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