Big Nevada insurer is cutting jobs

Thursday, Jan. 13, 2000 | 10:37 a.m.

SUN STAFF AND WIRE REPORTS

SANTA ANA, Calif. -- PacifiCare Health Systems Inc., one of the biggest health insurers in California and Nevada, said it will cut about 450 jobs, or 5 percent of its workforce, in the next year and take a charge of $7 million to $8 million in the first quarter to cover severance costs.

PacifiCare, which has 8,300 employees, said it will fire about 250 employees and eliminate an additional 200 positions through attrition.

PacifiCare, which has 3.7 million customers in nine states, is consolidating its sales-and-marketing and human-resources departments after it said its board is exploring options to increase shareholder value, including sale of the Santa Ana, Calif.-based company.

The cuts will come from all the states in which the company operates, a spokeswoman said.

In November, PacifiCare named director David Reed as chairman, demoting Chief Executive Alan Hoops, 52, from a post he was given in 1998. It's also been buying back shares.

Shares of PacifiCare closed Wednesday down $1.44 to $50.06. The company is the biggest operator of health-maintenance organizations serving people on Medicare, the U.S. government health program for the elderly.

Kayla Callas, public affairs director for PacifiCare in Nevada, said the state's 80 employees are part of the company's Desert Region, which also includes Arizona. Many of the 1,006 Arizona employees also handle administrative functions for Nevada.

Of 1,086 employees in the region, five will lose their jobs and 18 received letters saying their jobs would be eliminated in the next few months and that employees would leave through attrition, Callas said. Job cuts were not broken down by state.

PacifiCare serves about 62,000 customers in Nevada.