For anyone that's been here more than three years, this should look familiar. There are always subtle differences, with added steps and different spin, but the core sequence remains unchanged. So here goes...
"Voluntary retirement" - Week of 7/25 thru 8/11
This is a gross and insulting mischaracterization. They are offering the exact same terms as a normal RIF but with an additional lump sum payment at the start. I've seen $5000. (For perspective, Rechtin and those at the top make that in the time it takes them to take a cr-p on company time.) This will thin the herd a bit but won't come anywhere near the total needed to avoid RIFs. I've heard ~2000 have "responded" so far.Reorgs
Reorganizations are a fact of life in large corporations. Anytime there is leadership change, expect this to happen. This is especially true (and more widespread) when you have a CEO change. The reorgs to be announced in the coming weeks will lay bare the perceived role redundancies and will give us near the bottom a glimpse of what RIFs might take place. Unfortunately, in some areas that are maybe being eliminated in their entirety, you won't get this helpful warning sign. The reorg by itself may result in some additional attrition, but management won't be counting on this one.Return-to-office requirement
This one is new this time. If you are within 50 miles of a Humana facility, you will be expected to spend a percentage of your time onsite. No justification or effective date for the change have been offered. Cynically, we can assume this will help convince many more to leave voluntarily. Also, we can take this as another sign that employees are not trusted. Some of the spin will be that communication and collaboration are more efficient in-person. Fair argument up to a point, but with tech advancement (i.e Zoom, web cameras), the non-verbal communication argument is no longer valid, so you're not missing much except heavy breathing, BO, physical intimidation by some, and not being able to discretely step out to go to the restroom without calling attention to yourself. And what if your team is spread out all over the country or, as is the case with many IT partners, is offshore completely? Make no mistake, this is being done for those that want the illusion of power and control. The world has changed and matured, but management has not. Please note, this announcement will likely be made after the ERP period ends, thereby avoiding additional payouts while still reducing staff with almost no management effort.RIFs - by ~Nov 1
Total staff reduction target is ~8,500 FTEs. Humana doesn't publish total number of employees, so you're left with Google and Wikipedia...always reliable and bias-free. Regardless, that means somewhere between 10% to 13% reduction in staff. Humana historically (read 2023, 2017, and countless times prior) does RIFs that are finished by 1/1. Looking at this strictly from a financial or accounting standpoint, and recognizing that fiscal events contained completely in a year are easier to track than those spread across multiple years, we can see that 60 days prior to 1/1 is approximately Halloween and the first week of November. Granted, the severance packages are paid out like normal salaries, so those expenses would be on the books into next year, but much of the accounting confusion is addressed by having those classifications completed during the calendar year. The layoffs in 2017, as already cited in the Courier Journal's article from Monday this past week, occurred on Nov 6. So, buckle up and Happy Holidays to all!New normal and possible merger, acquisition, or dissolution
This is where the total speculation begins, but history supports it. Let's review.
Bruce Broussard was brought in when Mike McCallister hit his 60s and decided he didn't want to mess with the next big thing for the company and the industry. This industry is consolidating and has been for decades. (For context, in the late 90s, there was yet another merger attempt with Humana and United that was nixed by the DOJ. The following decade saw Medicare expansion and the ACA, McCallister's heyday that briefly slowed the consolidation efforts.)
Enter Bruce in 2013, a CEO with a history of helming companies during a merger, acquisition, or dissolution, and then leaving to do it again. (Insert your favorite "rinse and repeat" cliche here.) The Aetna acquisition (don't believe those that called this a merger... just look at the financials and you'll see who was buying who) was the one that actually made it to the dotted line and got announced at the end of the week of July 4 in 2015. That timing is also suspect, but that's for a different rant. Bruce's merger was ultimately also squashed by the DOJ, not coincidentally shortly before Humana arranged for a round of mass layoffs later that same year in 2017 (merger article here for anyone interested: https://www.cvshealth.com/news/company-news/aetna-and-humana-mutually-end-merger-agreement.html).
In the last few years, there was the "realignment" of Humana from four/five segments down to two: insurance and everything else (i.e. CenterWell). This structure alone allows for the company to be more easily sold and possibly have Humana dissolved as the parts are sold to eager buyers. This was the case over the last 24 months when there were substantiated rumors about a merger/acquisition with Cigna. Cigna is big in the commercial space and we divested ourselves of commercial completely, while we are good at Medicare and Cigna su-ks at it - fewer anti-trust concerns with complementary rather than competing segments. This means less DOJ scrutiny, although with the current political climate, that isn't saying much because these types of transactions are more likely to be allowed. Anyway, these talks fell apart. This can happen for all kinds of reasons, but ultimately, the sides couldn't agree on the numbers and who would run the combined company. No one leaves their ego at the door in situations like this.
At this point, Bruce has had two very high-profile failures to accomplish what the board hired him to do, so he decides to head for the door as he enters his 60s. I strongly suspect he was more likely shown the door with dignity (read stock options, parting gifts, your standard golden parachute) than left to decide on his own.
Enter Jim Rechtin, a more charismatic individual, but one with a similar background of leading companies through this kind of dirty work restructuring. His last company went bankrupt, though in his defense, he was hired six months after they filed for bankruptcy. We've seen Susan Diamond leave and a few others. Jim is methodically bringing in his own people. The point is this: the board has been trying to sell us or merge us for damn near three decades and is still trying to do it. Bruce and Jim were brought in to do just that. We may have periods where we thrive, others where we struggle, but merger, acquisition, and/or dissolution remains the goal because that is how you "maximize shareholder wealth" in this consolidating industry cycle.
Lastly, it is truly sad that this message board, Glassdoor, and Google are the closest things we employees get to transparency. I realize this is endemic of corporations across our country, but I naively thought at one point that Humana was different. It is not.
Godspeed, my friends.