UnitedHealthcare is offering buyouts to its employees in the benefits operations unit with a deadline of March 3, aiming to manage costs effectively after a challenging year.
Employees in the benefits operations unit of UnitedHealthcare have been given the option to accept buyouts if they resign by March 3, as disclosed by two individuals with insider knowledge. This move comes after a difficult year for the company, marked by significant events including a high-profile cyberattack and the tragic shooting of its CEO.
The buyout option is seen as a strategic effort to control expenses amidst rising medical costs, particularly for Medicare Advantage beneficiaries. The company has been dealing with financial strains from a costly cyberattack on Change Healthcare, a subsidiary, which compromised sensitive health information of around 190 million people. Furthermore, UnitedHealth Group has faced backlash over high healthcare costs.
The buyout program targets full-time and part-time U.S. workers in four segments under benefits operations: corporate, consumer operations, core services, and provider services. The terms offered will depend on the employees’ length of service and salary grade, with severance packages activated on their termination date. Notably, the benefits of voluntary buyouts may be more lucrative than those offered in any subsequent layoffs.
An internal memo indicated that the employment termination date for those accepting buyouts would be no earlier than May 1, although some might be required to work up to November 13. Despite the voluntary nature of the program, there has been a significant impact on staff morale, with employees expressing shock over the news, especially after the company reported a record annual revenue of $400.3 billion in 2024.
During a recent meeting, UnitedHealth executives highlighted the company’s cost-reduction strategies involving digital solutions, described as a ‘modernization agenda.’ This involves increased digital adoption, which CEO Andrew Witty suggests is just beginning. He emphasized the growing role of artificial intelligence in driving down expenses.
The backdrop of these developments includes UnitedHealth Group’s decision to lay off workers in its Optum division the previous year. Employees who decline the buyouts will retain their current positions or be reassigned to similar roles. The company has already launched a hiring drive with over 3,200 positions advertised, although the number receiving buyout offers remains undisclosed.
The future remains uncertain for UnitedHealthcare as it seeks to meet its resignation quotas and manage financial pressures from rising costs and past incidents. Employees face difficult decisions with potential layoffs looming if voluntary buyouts do not achieve the desired reduction in workforce.
