Humana (NYSE:HUM) will cut 2,500 jobs in one of its business units but add back enough workers in other areas so that the net cut in employees will be 1,400. Humana reported a sharp increase in earnings for the fourth quarter of last year when it released numbers on February 1.
Michael B. McCallister, Humana’s president and chief executive officer, said “the workforce reduction will not impair the company’s ability to serve its 10.3 million medical members and 7.2 million specialty-benefit members.” McCallister will not take a pay cut himself.
As usually happens, the news of the job cuts sent Humana’s stock up 1.4% to $46.64.
The odd thing about the firings is that Humana is doing so well. It said that it anticipates EPS for the year ending December 31, 2010 in the range of $5.15 to $5.35 versus its previous estimate of $5.05 to $5.25. Management must have decided it will do even better without all of those people.
Douglas A. McIntyre
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