(CTN News) – As Centene’s business evolves, it plans to lay off approximately 2,000 employees, or approximately 3% of its workforce, the Clayton-based company announced Tuesday.
As of this writing, the company has not disclosed how many of these employees will be located in the St. Louis area. As of December, Centene employed 74,300 full-time employees.
The termination will be announced between October 2 and October 5, according to confidential human resources documents obtained by Health Payer Specialist, an online health industry trade publication.
According to the documents, their last day of work would be December 8.
The plans were found in a 13-page document entitled “Supporting December Transition.”
Centene, a managed care company, announced Tuesday that it would offer severance packages and outplacement services to laid-off employees.
HR workers are directed to say to employees “Thank you for taking the time to meet with me today”, according to Health Payer Specialist.
During the past 18 months, Centene has been actively working on its Value Creation Plan… The [Medicaid] redetermination process and the impact of Medicare Advantage Star Ratings pose significant challenges to Centene.”
As Centene faces challenges in its Medicaid and Medicare Advantage businesses, the announcement comes after years of efforts to improve profit margins.
As Centene grew from a single Medicaid plan into a giant in the managed care industry, it expanded rapidly through acquisitions for most of its history. As a result of investor pressure in recent years, the company has been forced to reduce its costs.
A plan to improve margins and shed assets was announced in 2021. During this period, the company has sold subsidiaries and relinquished much of its real estate footprint, both in St. Louis and across the country.
As a result, 90% of its workforce was either fully or partially remote last year, indicating that it has embraced remote working.
It is expected that the company’s Medicaid membership will decline as states resume eligibility checks following a three-year hiatus caused by the pandemic. Although states were allowed to begin in April, most waited until June and July to begin the process.
According to Centene’s CEO Sarah London, Medicaid membership has ebbed and flowed in recent months.
Centene has also been working to improve its Medicare Advantage quality scores, which declined in 2022. The company attributed the drop to COVID-related disaster relief provisions at the time, and last year said it was taking “aggressive action” to improve the ratings, such as hiring a chief quality officer and including quality improvement as a compensation metric.
In spite of this, the company has informed investors several times that it takes time to raise quality scores.