Humana's early retirement offering to some employees raises concern for local economist

LOUISVILLE, Ky. (WDRB) -- Humana is now offering early retirement packages to eligible employees, raising some question marks.

Humana is Louisville's 7th largest employer with 10,000 employees; some are getting the option to retire early.

Some Humana employees got an email Monday saying they're eligible for a voluntary early retirement program. To qualify, the employee must be over 50 years old and have worked for the company for at least three years.

"All things equal of course, this is not good for Louisville. It's not a good sign for Humana. The good news, if we're looking for more positive signs, is that they're trying to get more lean in a difficult environment," Indiana University Southeast Professor of Economics Dr. Eric Schansberg said.

Schansberg said there could be several reasons Humana has made this decision.

"We don't know what's going on in the minds of the CEOs and those making these kinds of decisions, but we do know that it can be a general cost cutting technique, or that it can be targeted at hitting certain kinds of workers, and by going after those over 50," Schansberg said.

One employee, who asked to stay anonymous was offered the early retirement.

"It's weird to get an early retirement package, but also I'm actually excited, because it gives you an opportunity to evaluate, like where you are right now," the employee said.

They say they're not worried about the future of Humana in Louisville.

"I don't think this is a bad thing for Humana to do, any company to do, in fact, but I do think Humana is setting itself up to be successful so they can really take care of their customers that come to our insurance company," the employee said.

When WDRB asked Humana what this means for the future, a spokesperson said in a statement:

"Humana’s commitment to our hometown remains strong. Thousands of Humana employees live and work in the Louisville area, the largest concentration of Humana employees in any city in the country. We are proud to have such a major presence in Louisville, providing a strong anchor for the Downtown business community."

Humana's second quarter report, released Wednesday, shows earnings are ahead of what the company predicted.

A current employee said in an email about the report, the CEO also mentioned potential layoffs.

When asked if the layoffs are going to happen and if they're related to the retirement program, Humana sent this:

"Humana has a transformation agenda underway that includes both near-term tactical cost initiatives, as well as longer-term efforts that change how we operate through increased automation and use of technology. The near-term initiatives include the early retirement program that was announced earlier this week, as well as expanded efforts to contract out additional aspects of our shared service functions and adjusting certain associate benefits to align with the competitive market. We will provide updates on our transformation agenda as initiatives are rolled out. Ultimately, we want to create a more nimble, technology-enabled organization that can respond more quickly to consumer needs and expectations."

Humana could not share how many people were offered the early retirement option or how many people they plan to accept it.

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