Centene Corp. will offer buyouts to most employees to cut expenses after membership in its health insurance plans dropped substantially over the last year, according to a company spokesperson.
While employees will have the chance to apply for the voluntary separation program, the offer isn't guaranteed or automatic, a spokesperson said. The St. Louis-based health insurer had 61,000 employees in the first quarter. The spokesperson didn't say how much the company aims to shrink the workforce, but layoffs could follow if Centene doesn't meet its target through voluntary exits.
"When our membership shifts, we need to shift our organization accordingly," Centene Chief Executive Officer Sarah London said in a message to staff Monday that was viewed by Bloomberg News.
Centene shares fell 2.7% on Monday in New York trading.
Centene's overall membership in the first quarter declined by 6% from a year ago to 26.3 million, according to a filing. The company is focused on government health programs including Medicaid for low-income Americans, Medicare for older people and Affordable Care Act plans.
Centene saw the biggest drop in its ACA business, losing about 2 million members this year after Congress let COVID-era subsidies that lowered the cost of those plans expire.
The company is forecasting 2026 revenue of $189.5 billion at the midpoint, about a 3% decrease from 2025. Centene's shares plunged last year after the company pulled its outlook, but they've recovered to gain 54% this year through Monday's close. That compares with an 10% gain in the S&P 500 Index.
The timing of the buyout announcement was "unusual," analysts from Barclays wrote in a research note, but it doesn't appear to be driven by the actuarial data update that tanked Centene's shares in July.
The insurer is preparing for a further squeeze on its business in the years ahead. Congress last year cut more than $900 billion from Medicaid over a decade, with work requirements starting next year. About 10 million people are expected to lose insurance coverage by 2034 under President Donald Trump's signature budget law.
