Molina Healthcare Reveals It Will Lay Off About 1,400 Employees in Memo From Interim CEO

 

Molina Healthcare's corporate headquarters in Downtown Long Beach. Photo: Asia Morris 

Molina Healthcare is poised to cut about 1,400 positions from its workforce according to an internal memo sent to employees and reported by Reuters Monday afternoon.

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The cuts would impact Molina’s corporate and health plan jobs but not its Pathway’s behavioral health program, according to the memo. The cuts are part of the company’s “Project Nickel”, which chief financial officer and interim chief executive officer Joe White said is part of the company’s future focus of being “exceptionally strategic in doing more with less.”

“We must be smarter, faster, more nimble and more effective. We must hold ourselves and one another accountable for always doing what is best for our company,” White wrote in the memo first reported by Reuters and obtained by the Post. “We must commit to being the highest value managed care solution for people receiving government assistance. We must increase value by improving quality and driving down costs.”

White described Project Nickel as a targeted and deliberate action that will put the company in a better position in the future so they can ensure the Molina mission continues. The cuts, which represent 10 percent of both the corporate and health plan sectors, will impact all levels ranging from senior positions to front-line staff, the memo said.

The memo stated that the cuts will simplify management and reduce the organizational layers. Those affected by the layoffs, White said, would be treated with dignity and would be eligible for severance packages, resume and interview support and possible placement at other Molina locations.

“I am confident these changes will only improve the quality of care we offer to our members, our service to our providers and our partnerships with regulators,” White wrote. “With your help, we can weather these challenges and emerge a stronger and healthier company as One Molina.”

Reached by phone, a representative from Molina said that they could not comment on the memo at this time.


 

News of the cuts come less than two weeks after the Long Beach City Council approved a business support team to work with Molina to ensure that the company keeps its Long Beach ties. Although Long Beach is the healthcare giant’s headquarters, Molina operates locations in a handful of states and the memo did not specify which cities or states would be hit by the layoffs.

During the discussion on how to help retain Molina in Long Beach, Mayor Robert Garcia said that his private conversations with White had indicated that Molina is intent on staying committed to Long Beach, and Long Beach to Molina.

“He [White] wanted to be clear in our conversation and I was clear with him that Molina Healthcare is one hundred percent committed to Long Beach and Long Beach is one hundred percent committed to Molina Healthcare,” Garcia said during the July 11 meeting.

Molina is one of the largest employers in the city and has operated in the city for over three decades with its corporate offices located in downtown. However, the past few months have seen Molina undergo a public makeover with John C. Molina and J. Mario Molina being fired by the board of directors in May, the company shipping hundreds of jobs across the Vincent Thomas Bridge into San Pedro and continued speculation that the company could be for sale.

Its December earnings report showed that Molina’s profits had dropped significantly from those reported for 2015 with it posting a $52 million profit last year versus a profit of $143 million in 2015. Its next quarterly report is expected to be released early next month.



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