Long Beach-based Molina Healthcare Inc. plans to cut 1,400 jobs in the next few months, Reuters reported Monday.
The company’s interim chief executive, Joe White, said in an internal company memo obtained by Reuters that the announcement aims to cut costs. The cuts would affect 10 percent of Molina’s 6,400 corporate employees and 10 percent of 7,700 health plan jobs, the memo said.
Molina largely caters to low-income patients on Medicare and Medicaid, and it expanded to provide insurance plans through the Affordable Care Act under the Obama administration. As Republicans in Congress move to repeal and replace the landmark health care legislation, that has created uncertainty for health care companies.
While Molina saw its membership and revenue grow last year, income fell short, according to its annual financial report. Revenue in 2016 grew to $17.8 billion from $13.2 billion in 2015, as membership climbed to 4.2 million from 3.5 million. However, net income fell to $52 million last year from $143 million in 2015.
The announcement follows the abrupt dismissal of the company’s founder’s sons from top leadership positions in May – J. Mario Molina, who was chief executive, and John Molina, who was CFO. White, who was chief accounting officer at the time, was tapped in to be interim chief executive.
Manufacturing and trade reporter Shwanika Narayan can be reached at firstname.lastname@example.org. Follow her on Twitter @shwanika.