You likely know about this already–they didn't wait for Thursday. The suddenness of the public announcement on top of the earnings is curious and generally not a route taken publicly by other payers.
https://www.healthcaredive.com/news/centene-to-ax-3k-jobs-as-run-of-profitable-quarters-ends/594774/
Reductions will be in areas of significant overlap from acquisitions. If you're in an acquired company or about to be (Magellan), past time to be looking.
Desperate to buck up the share price which has plummeted. Live by Wall Street, die by Wall Street.
14 replies (most recent on top)
Folks are overlooking another factor in being let go - Salary amount.
HIgher paid people in the same department vs. lesser paid people...they are often included.
At Bank of America in the IT department, we were constantly told there is a list of all 50 employees in the department...and we were literally constantly being shuffled from 1 to 50...based on management discussions. When layoff came, the bottom X were let go, based on being evaluated regularly. What those factors were that determined which position you landed on, I do not know.
Centene / Wellcare is a lost case, they never invested in people, technology and they do not have the vision neither. no doubt there are talented people, but no a lot and without a good intentions companies get ahead of the game, I do not have sense of positive outcome for Centene / Wellcare, it is really getting very big to be manage in a efficient way, plus the lack of vision and investment, I really believe is all about the shares and create a momentum and nothing else. It is going to be a huge time bomb to explode where many will be affected, mainly members, employees and brokers, they have zero capabilities, observance for compliance and no really a organize, effective business plan for this merger or before the merger, they are just concern the dollar at expenses of employees, member and vendors. One of those business plans where all only winners are executive employees with huge bonus and salaries, nobody else, no even shareholders.
The interesting things is Magellan's BH business is their core - but their Rx, Physical Health, etc have large overlap with Centene. Magellan focuses on BH and that is the strength of their core people. I would anticipate many of the layoffs to come from within existing Centene if they believe Magellan is the BH leader within the new organization. I have heard they intend to keep Magellan somewhat independent - as Magellean was likely somewhat diluted in trying to expand from BH into other areas - at that point they are playing with the big dogs like Centene. Magellan should bring Centene some best in class BH people - so I would think thats a good thing for many Magellan employees.
I don’t think anyone believes IP is stolen or that Centene has any IP to steal. The point was made to not fund their competitor (AWS-Amazon) by using AWS as cloud provider. Why not hand Humana and Anthem millions of dollars a year just to help them steal their Medicaid members? Same thing.
The main question here is will all the layoffs occur on Thursday February 11th? Any insight would be appreciated.
Amazon and AWS are already far ahead in the healthcare game with pharmacy (PillPack, Amazon Pharmacy). HealthLake is AWS, stores and analyzes structured and unstructured data to extract health information. Amazon was part of Haven and has access to much of the information developed there though it's shut down. They also have access to employer data.
And anyone who believes that AWS keeps the Centene IP sacrosanct in the cloud also believes in the Tooth Fairy.
I can attest that performance is not a factor in all of the eliminations taking place this round. I know of several strong performers who will be impacted. Centene is not a meritocracy.
Sure, some people are on the list because they are dead weight, but this is also about headcount, structure, and above all, the almighty dollar.
Nothing wrong with playing catch up. You will get there. And, I agree that you don't need cloud to transform and the Centene IP will not be stolen bc it is in the cloud. As Humana, UHG and Anthem acquire Centene members in the short term, I do hope to see Centene find their groove as a technology company to compete against Optum and AWS/Amazon in the long term. Good people there.
- If you think that we can do a digital transformation in the modern age without leveraging the cloud, you're mistaken.
They are already doing exactly that. They are deep in the weeds of a digital transformation. If you think that we can't do a digital transformation in the modern age without leveraging the cloud, you're mistaken. If you think that hosting things in the cloud means that Amazon can steal our IP, you're doubly mistaken. Other cloud providers (Azure, Google) do not have anywhere near the versatility, availability, or capability that AWS does. AWS was the correct strategic partner for the future; if you think other competitors aren't already operating in their cloud, that's again incorrect.
We're late to the cloud; we're playing catch up.
Agree with all of the above but wanted to add that Centene is forecasted to remain at least flat year over year in terms of growth, with many analysts predicting Centene to shrink with UHG, Humana and Anthem able to acquire and retain customers for a lower cost than what Centene can given their massively outdated infrastructure and legacy systems. The CIO and CTO chose AWS and opened the door to Amazon to learn how to be a payer. Amazon Health and Amazon RX will disrupt the Medicaid and Marketplace world and acquire customers from all of the above over the next 3-5 years. Amazon/AWS can simply do it for less. Centene attempting to be a technology company that also does healthcare seems to be a Hail Mary but most analysts will tell you that Centene will never compete with Amazon/AWS and Optum who are both established technology companies and who both are at least 5 years ahead of where Centene is today. Adding Sarah London and Bryan Sivak might help to plug the dam but Centene will likely be laying off thousands more to pay for their mistakes in strategy. You simply cannot grow by acquisition and never invest the money to digitally transform. Might be time for MFN to step aside, along with Mark Brooks and Bruce Lee.
- Except it's not as easy as you'd think to get rid of poor performers. Due to how litigious the US is, there has to be a long paper trail to prove that someone is a lost cause. There are only a few immediately terminable offenses. Unless you're a VP, you're basically stuck with a lousy hire as it's constantly their word against yours.
Anyone who scored low on their performance reviews are immediately a candidate to have their "position eliminated". These positions will magically reopen in 6 months because the work isn't going anywhere, just the people.
The person above clearly has no idea how this works. The percent cut on each team was already determined before performance is even considered. This is about getting a guaranteed cost savings.
Case in point - they’re cutting 3000 jobs and an additional 1500 open positions. Those open positions don’t have poor performance issues.
The Q3 2020 results were hammered by losses in Medicaid and HIX. We need to show the market we are making adjustments to improve our bottom line.
Don’t ever assume it’s purely about performance. If leaders are doing their job, poor performance is continuously managed out.
This is nothing new. Centene continually grows through M&A and culls the underperformers of their workforce annually, usually about this time period. This is just a convenient excuse to remove folks that don't pull their own weight. It's not malicious, it's just good business.
Their press release says that they will be firing people whose role is duplicated by recent mergers–that doesn't mean that the folks from the acquired companies are the ones being let go. It's about letting go of poor performers. Period.
Trim the fat.