EmblemHealth to lay off hundreds of IT workers as it outsources to Cognizant
EmblemHealth, the $10 billion New York-based health insurance plan, informed its IT staff this week that 250 workers would face layoffs as it outsources operations to Cognizant.
"Our recent financial challenges have been well-documented," said EmblemHealth chief executive officer – and former AHIP CEO – Karen Ignagni, in a video message to IT workers.
The insurer saw a combined net loss of $113 million last year in 2015, and $485.8 million the year before, according to Crain's New York Business.
In the video, Ignani said one fact highlighted as the health plan works toward a turnaround is that "we could no longer ignore our outdated technology platform or the manual processes associated with it."
EmblemHealth worked for months doing an "intensive assessment" of whether to acquire new technology or partner with an organization "that has the resources and capabilities to keep up with changes that happen almost daily in the technology field," she said.
"We came to realize that building our own technology would require hundreds of millions of dollars and require time that we didn't have," said Ignagni.
Partnering with Cognizant and its TriZetto subsidiary "will give us a modernized platform and the type of automation our competitors have," she said.
However it also means EmblemHealth "will no longer require the level of staffing we now have to maintain the old system," said Ignagni. "Several hundred IT and operations positions will be eliminated."
In recent weeks, IT employees had been trying to convince the health plan to keep the jobs rather than outsourcing them, according to reports.
Ignagni noted that some EmblemHealth staff would be offered a "customized retraining program that we are preparing in partnership with Cognizant," and that "a number of employees" would be offered positions with the company, which is known for its use of H-1B visa workers.
About two dozen workers protested at EmblemHealth's Manhattan offices this week, according to Crain's, which noted that some IT staff have been working with labor attorney Sara Blackwell, who's led other battles with payers on behalf of laid-off workers.