A general view outside the United Healthcare corporate headquarters on December 4, 2024 in Minnetonka, Minnesota.
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UnitedHealthcare is offering certain employees in its benefits operations unit the option to accept buyouts if they quit by March 3, following a tumultuous year for the insurance giant, CNBC has learned.
Those who don’t accept the offer will continue in either their current role or a comparable position, two people familiar with the matter told CNBC. If the company does not meet a resignation quota through buyouts, it will lay off employees, the people said, citing an internal resource site.
The company declined to share how many employees received buyout offers under the so-called Voluntary Resignation Separation Program. The benefits operations unit oversees multiple subdivisions that help manage customer service, claims, enrollment, customers’ insurance benefits and more, one person said.
UnitedHealthcare, the insurance arm of UnitedHealth Group, is the largest private health insurer in the U.S. UnitedHealth Group had more than 440,000 employees as of December 2023, but it does not disclose how many people work in its benefits segment or overall insurance business.
UnitedHealth Group is the biggest health-care conglomerate in the U.S. based on revenue and its roughly $460 billion market cap, but it has tried to cut costs as medical expenses increase for Medicare Advantage beneficiaries and it deals with the fallout from the costly cyberattack against its subsidiary Change Healthcare. It has also faced renewed anger over high health-care costs in the U.S., following the killing of its insurance unit CEO Brian Thompson in December.
Employees eligible for the buyouts include full-time or part-time U.S. workers assigned to four internal segments under benefits operations, including corporate, consumer operations, core services and provider services, according to an internal memo sent Monday and viewed by CNBC.
“This voluntary option is part of our ongoing efforts to ensure our team is best positioned to meet the evolving needs of the people and customers we are honored to serve,” a UnitedHealth spokesperson told CNBC in a statement. “We continue to grow our workforce with more than 3,200 positions currently available on UnitedHealth Group’s careers site.”
The company expects employees’ termination date to be no sooner than May 1, according to the memo. The memo said some employees who accept buyouts may need to work beyond that date, but the company does not expect to require them to work past Nov. 13.
Their severance packages will depend on the number of years they have spent at the company and their salary grade, and will kick in on their termination date, the memo said. The benefits provided to employees included in any potential future layoffs may not be “as favorable” as those offered to workers under the buyout program, according to the memo.
Workers who received the buyout offers are in shock, said the people familiar with the matter, especially after UnitedHealth Group reported its highest-ever annual revenue in 2024. The company said in its January earnings release that it generated $400.3 billion in revenue in 2024, up 8% year over year.
UnitedHealth executives said during the company’s fourth-quarter call in January that “digital adoption” helped the company lower costs. CEO Andrew Witty called it a “modernization agenda” which includes but isn’t limited to artificial intelligence.
He added that UnitedHealth is “just kind of scratching the surface of the opportunity.”
Workers were informed about the buyouts Monday during a meeting that lasted around 10 minutes and were told they will have the opportunity to ask questions in information sessions in the coming days, the people said.
The buyouts follow the shooting of Thompson, which unleashed a torrent of pent-up anger and resentment toward the insurance industry and renewed calls for reform.
That came only months after Change Healthcare, which processes medical claims, was hit by a cyberattack in February 2024 that compromised the protected health information of around 190 million people. UnitedHealth Group has paid out more than $3 billion to providers affected by the cyberattack.
UnitedHealth Group also laid off workers in its Optum health services division last year.
Shares of the company closed up 2% on Wednesday.