Aetna Announces Targeted Job Eliminations.-- Reduction of approximately 625 positions, or 1.75 percent, today -- -- Similar number of reductions anticipated by end of first quarter 2010 -- -- Company to record severance and facilities charge -- HARTFORD, Conn. -- Aetna (NYSE NYSE See: New York Stock Exchange : AET AET Aetna, Inc. AET After Extra Time AET Actual Evapotranspiration AET Alliance for Environmental Technology AET Alpha-Ethyltryptamine AET Applied Extrusion Technologies, Inc. ) today announced that it is reducing its workforce by approximately 625 positions. This action is consistent with our goal of aligning our cost structure with the company's membership outlook for 2010. Aetna currently has approximately 35,500 employees. The company expects to incur a restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of approximately $40 million, after tax, as a result of today's workforce reductions and ongoing real estate consolidation.1In addition, Aetna anticipates making a similar number of workforce reductions by the end of the first quarter 2010, and expects to disclose the financial impact of that action once decisions are finalized. "The economic downturn has had a significant impact on our customers. In addition, we must prepare for the impact that health care reform and regulatory changes may have on our business," said Ronald A. Williams, chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Streamlining our business now will enable us to improve our competitiveness and redirect resources to areas with a greater potential for future growth. Change is never easy but, working from a position of strength, we should be able to manage through the evolving environment." The company said these decisions are designed to ensure Aetna's ability to meet its service and quality commitments to customers, members and other constituents. Eligible employees will receive severance benefits based on length of service as well as outplacement out·place·ment n. The process of facilitating a terminated employee's search for a new job by provision of professional services, such as counseling, paid for by the former employer. and other support programs. In addition to making workforce reductions, the company expects to consolidate field offices in some locations in order to reduce real estate costs. The company is not exiting any markets as a result of this announcement. About Aetna Aetna is one of the nation's leading diversified health care benefits companies, serving approximately 36.3 million people with information and resources to help them make better informed decisions about their health care. Aetna offers a broad range of traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health Behavioral health was first used in the 1980's to name the combination of the fields mental health and substance abuse. As an example, an organization serving both mental health and substance abuse clients might refer to its practice as behavioral health or , group life and disability plans, and medical management capabilities and health care management services for Medicaid plans. Our customers include employer groups, individuals, college students, part-time and hourly workers, health plans, governmental units, government-sponsored plans, labor groups and expatriates. For more information, see www.aetna.com. 1As Aetna believes this charge neither relates to the ordinary course of its business nor reflects underlying business performance, the company will reflect the charge as an "other item" and exclude it from 2009 operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before CAUTIONARY STATEMENT -- Certain information in this press release is forward looking, including our projections as to the number of positions to be eliminated from our workforce, the timing of the anticipated future workforce reductions and the amount of the projected fourth quarter 2009 restructuring charge. Forward-looking information is based on management's estimates, assumptions and projections, and is subject to significant uncertainties and other factors, many of which are beyond our control. Important risk factors could cause actual outcomes and results to differ materially from what is expressed in the information in this press release, including changes in our actual tax rate compared to the rate assumed in estimating the restructuring charge, changes in the number of severed employees compared to the number assumed in estimating the restructuring charge, changes in the amounts payable to severed employees compared to the amounts assumed in estimating the restructuring charge and changes in the expenditures associated with vacating leased properties and/or our ability to sublease sublease n. the lease of all or a portion of premises by a tenant who has leased the premises from the owner. A sublease may be prohibited by the original lease, or require written permission from the owner. those properties compared to the amounts assumed in estimating the restructuring charge. For more discussion of important risk factors that may materially affect Aetna, please see the risk factors contained in Aetna's 2008 Annual Report on Form 10-K and its Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, on file with the Securities and Exchange Commission ("SEC"). You also should read Aetna's 2008 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, on file with the SEC for a discussion of Aetna's historical results of operations and financial condition. |
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