Humana Cuts 1,400 Jobs; Market Approves

NEW YORK (TheStreet) -- Humana(HUM) announced Wednesday that it plans to reduce its workforce by 5%, or about 1,400 positions, over 2010.

The market is responding positively to the measures, pushing up shares of Humana by 2.3% to $47.10.

Humana says the job reduction -- just the latest, of course, of many recent major corporate layoffs -- will mainly come about through attrition, position eliminations and outsourcing, among others. The company says those unable to find another position within Humana will receive severance.

In all, the workforce reduction involves 2,500 job cuts combined with the creation of 1,100 additional jobs. These additional jobs will occur in what the company calls growth areas, including medical-cost containment, pharmacy management and specialty products.

"This regrettable but necessary reduction in our workforce is a direct result of Humana's need to align the size of our company with that of our membership," Humana's chief Michael McCallister says in a statement.

Humana says the workforce reduction shouldn't affect its earnings guidance, which the company reaffirmed to be $5.15 to $5.35 per common share for 2010.

In related news, employers have shed another 20,000 jobs in January, according to the Labor Department's nonfarm payrolls, in layoffs that have hit all corners of the U.S. economy.

-- Reported by Andrea Tse in New York

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