IBX laid off 3% of staff amid ‘cost pressures’ and increasing competition

Independence Blue Cross told employees on Monday that 3% of staff would be laid off as part of restructuring at the company. Affected employees, about 130 people, were informed Tuesday.

The company confirmed Wednesday that the workforce reduction affected Independence and some of its subsidiaries, AmeriHealth and Tandigm Health, across a total workforce of about 4,600. AmeriHealth Caritas was not included in the reduction.

CEO Gregory Deavens announced the restructuring and workforce reduction on Monday, according to a company statement shared by a spokesperson. Those impacted will be offered severance and other benefits.

“In response to rapid changes in market conditions and industry dynamics, we are undertaking a careful redesign of our organization,” the company said. “To effectively address the evolving needs of our customers and recent market trends, we are transforming our organization structure to better position us for the future.”

“Cost pressures and an increasingly competitive environment have caused many health-care companies to announce structural or other changes to their organizations and cost structures,” the company added.

One employee, who asked not to be named out of concern for their job, said they learned of the layoffs at a Monday meeting that included about 1,200 in-person and virtual attendees. Communication left attendees wondering whether they would be among the dozens affected by the layoff, the employee said.

Along with the workforce reduction, IBX announced organizational changes that included the departure of eight leaders, according to a document distributed companywide by IBX leadership, obtained by The Inquirer.

Independence is the region’s largest health insurer and a major employer, with a workforce of about 3,000 at the Center City-based company.

The insurer reported a significant decline in operating profit last year, even as total revenue increased considerably to more than $31 billion. IBX blamed the 32.5% profit decline, to $388 million, on expense growth for pricey new drugs and increased use of health services.

Numerous employees of Independence spoke out earlier this year when the company announced that it was ending the “hybrid of choice” model and requiring everyone to work in the office at least three full days each week.

The previous model allowed most staff to work remotely as much as they wanted to, and many employees said they were given the impression that the policy would be permanent. Some said they were attracted to the company in the first place by the “hybrid of choice” model, which was used as a recruiting tool. They said the policy change made them feel they’ve been “misled” and “lied to” by top management.

Editor’s note: This story has been updated to specify that AmeriHealth Caritas was not included in the workforce reduction.