Monday, Aetna announced it will be increasing the company’s minimum wage to $16/hour. In the internal memorandum provided to managers, the company said “We will not be funding this program through job eliminations…
According to a source, during a company-wide webcast earlier this week, CEO Mark Bertolini said “We do NOT anticipate any lay offs. There is plenty of room for employment within the company. That would of happened in December if we were going to do anything like that. We are past that.”
Wednesday, 11 employees in Coventry Workers’ Comp Services Franklin, TN office were fired. Sources indicate layoffs have happened in several other CWCS locations as well.
While it may well be that the giant healthplan’s financial plan doesn’t directly link the firings to funding the higher wages, the timing and the details provided to this reporter show a rather unfortunate lack of planning and coordination.
Telling low-wage workers they’re getting a big raise, then, after they’ve gone home, told their spouses and kids, perhaps planned on a celebratory dinner with chuck roast instead of the usual hamburger, bought that winter coat they’d been unable to afford, and maybe even paid a couple bills, they get the “just kidding! you’re fired!” notice is, if not intentionally cruel, certainly unintentionally so.
And pretty dumb. The company got lots of (well-deserved) positive press and supportive comments from around the country for the wage and benefits upgrade. Then, they turn around and fire some of those same low-wage workers they’re saying they want to help.
What’s more troubling is why.
Sources indicate the jobs lost are in Coventry Work Comp Services unit, primarily handling administrative tasks including preparing network panel postings for the Hartford’s workers’ comp customers, scheduling claimant appointments, and Quality Assurance. But they aren’t going away, rather Aetna is off-shoring them to the Philippines. Several management staff remain on payroll for now, but their positions are also going to be eliminated after they train their Filipino replacements.
By most accounts Aetna CEO Mark Bertolini is a good guy. He’s aware of and quite concerned about income inequality. He asked his execs to read Thomas Piketty’s treatise on the subject. Aetna is also significantly improving benefits for the company’s lower-wage workers. In a statement, Bertolini said:
“Since I became CEO, one of my goals has been to help re-establish the credibility of corporate America…I firmly believe that companies can ‘do well by doing good.’ With these investments, we are leaning into the recovering economy and working to bring everyone along instead of just a few.”
My read on this is Aetna is not a bad company and its execs are not bad people. There’s no intentional cruelty here, this isn’t a heartless oligarch playing God without any regard for the little gal.
While Bertolini is a good guy, some of his underlings are not. This is a dumb decision made by a tiny division executed by crappy managers with no regard for how it affects folks making low wages doing important work for years.
My characterization of the managers is based on the timing and their petty. small-minded, and just plain stupid cost-cutting moves which included no Christmas bonuses, no holiday celebration of any kind (not even the traditional dinner), paying laid-off workers only 50% for their unused vacation time, and a paltry 4 weeks of severance for workers with more than 2 years at CWCS.
One wonders if those managers at least handed out “Merry Christmas, now get the hell out of here” cards.
What does this mean for you?
A pretty awful winter for folks who thought they were going to get a nice raise.
note- I reached out to Aetna several times, delayed this post in an effort to get their side of the story. After waiting all day, i informed them I had to go to press.
If I hear from Aetna I will let you know…