Molina Healthcare has scrapped plans to move into a San Pedro office tower and is now vacating an office building in Long Beach in a large-scale overhaul to help save hundreds of millions.
The Long Beach–based managed care health insurer had planned to move hundreds of employees into four floors of the Topaz office tower at 222 W. Sixth St. in San Pedro. But now the company has decided to sublet the 100,000 square-feet of space instead.
The publically traded Fortune 500 firm is also moving workers out of similar offices at 1 World Trade Center into its nearby Long Beach headquarters on Ocean Boulevard.
“Due to the restricting that we announced earlier this year, Molina no longer needs the additional space,” said Molina spokeswoman Sunny Yu, in an email.
Molina develops health plans for needy residents on Medicare or Medicaid who buy insurance through subsidized markets such as Covered California.
The company posted a net loss of $97 million in the third quarter ended Sept. 30 due to lower enrollments and higher costs. The company reported a $42 million profit during the same period last year.
Molina Healthcare began a restructuring effort to save $200 million annually on Jan. 1. The company has closed primary clinics outside California; laid off 10 percent of its workforce, or 1,400 employees; and replaced the company founder’s sons with a new chief executive
The cost of restructuring led to a $250 million loss in the first nine months of this year, company officials said.
Molina announced Wednesday that Dr. J. Mario Molina, son of the late Dr. C. David Molina, founder of the company, had stepped down from its board of directors after more than 20 years as chief executive.
Molina Healthcare stock closed at $76.27 on Friday, up 71 percent since its 2017 low of $44.68 on March 20.
Health business reporter Dana Bartholomew can be reached at firstname.lastname@example.org. Follow him on Twitter @_DanaBart.