The cuts would be done within 12 to 18 months of the deal’s closing, Connecticut Insurance Department officials were told at a public hearing in Hartford. Approximately 30% of the 200 positions slated to be eliminated will be done through voluntary attrition, according to a Hartford Courant report.
This is the latest move after the $2.1 billion sale of the retirement business was announced last November (See It’s Official: Pru Buys CIGNA Retirement ). CIGNA put the retirement business on the auction block after deciding to focus on its troubled health insurance operations. The companies hope to complete the deal, subject to regulatory approvals, in the first half of this year. This will involve CIGNA shifting its retirement services business to a company called CIGNA Life Insurance Co, which Prudential would acquire.
Overall, Prudential is aiming to cut $69 million, or 16%, from the combined retirement businesses’ annual expenses, Scott Sleyster, president of Prudential Retirement, told the Courant. Sleyster noted that the job cuts could be mitigated by growth of the business over time. Some of the 200 jobs would be eliminated for good, while others could represent a shifting of work to other locations.
However, the job loss blow is only salt in the wound for Hartford-based CIGNA that announced 3,000 job cuts nationwide in February in other parts of the health insurance company, mainly in health care and corporate operations.