LONG BEACH (CBSLA.com) — Long Beach-based Molina Healthcare is on the brink of significant layoffs, it was reported Tuesday.

The company, which offers health care plans for people receiving government assistance through such programs as Medicare and Medi-Cal, is the only Fortune 500 company to be headquartered in Long Beach.

Interim Chief Executive Joseph White sent a memo to Molina employees Monday warning that the company planned to lay off 10 percent of the firm’s corporate and health plan employees by the end of September, which amounts to about 1,400 people, according to the Long Beach Press-Telegram. The company employs about 6,400 people in its corporate division, and 7,700 people in its health plan division.

“The departure of any of our talented and dedicated co-workers constitutes a difficult loss,” White wrote in the memo, which was obtained by the Long Beach Press-Telegram. “But we must never flinch from making the decisions that will allow the Molina mission to continue. And that mission cannot continue unless Molina remains a strong, independent company.”

Layoffs are expected to take place over the course of two phases and be accomplished by the end of September, according to the memo. White’s message also reports that senior leaders’ posts are among those to be affected, and that people who lose their jobs can anticipate severance packages and help in moving on to future employment.

The news follows the Molina Board of Directors’ surprise decision in May to fire J. Mario Molina and John Molina, who had previously served as the company’s chief executive and chief financial officers. The brothers are sons of the company’s founder, the late C. David Molina.

The Molina brothers remain on the company’s board of directors.

Long Beach City Council voted earlier this month to create a business support team tasked with keeping Molina Healthcare in town.

Molina Healthcare has grown substantially in the years since then-President Barack Obama signed the Affordable Care Act in 2010. At the end of that year, Molina Healthcare employed some 4,200 people, according to its annual report for 2010. Its total employment quintupled between then and the end of last year, when some 21,000 people worked for the firm, the Press-Telegram reported.

(©2017 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)

Comments (2)
  1. Financial mismanagement caused the problem, but the rank and file has to pay for it.
    The major stockholders are trying to bolster the company’s financial health in the short term so they can sell their stock for top dollar and get out rich.

  2. It is amazing there is no mention of our government lack of decision making to make changes to the Affordable Care Act and how this is affecting the healthcare industry. Healthcare yearly budgets are basic on the guarantee monies they will receive from Medicare and Medicaid. Without our Senators and House of Representatives doing their job to compromise on needed changes to HealthCare and putting the changes in simple language for all the people to understand, since, there will be changes that will effect everyone. Just as we have to compromise on our own home budget to avoid over spending, the governments needs to avoid financial mismanagement. Molina is only an example of what will happen to other small healthcare facilities who grow fast because of ACA but did not plan ahead for the changes they all saw coming but closed their eyes too.

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