MINNEAPOLIS — UnitedHealth Group Inc. cleared its decks of bad news Wednesday, announcing a lower profit outlook, a restructuring that will trim 4,000 jobs and an $895 million payout to settle a class-action lawsuit over options backdating.
UnitedHealth said its restructuring would change operations on every level to focus more on regional coverage. The new UnitedHealth will be “simpler, leaner and faster,” chief executive Stephen Hemsley said.
In Colorado, UnitedHealth operates PacifiCare, one of the state’s largest insurers. It employs about 730 people here.
Company spokeswoman Cheryl Randolph said the cuts have already begun across all units but didn’t say how many local workers would be affected.
Analysts saw the announcements as perhaps the end of a long rough patch for UnitedHealth, the nation’s second- largest health insurer.
The company has been wrestling since 2006 with the backdating scandal, which led to the forced departure of chief executive Bill McGuire, who helped build UnitedHealth into a managed-care powerhouse.
UnitedHealth took a big step toward making those problems go away by agreeing to pay $895 million to settle a class-action lawsuit led by the California Public Employees Retirement System (CalPERS) and the Alaska Plumbing and Pipefitting Industry Pension Trust. The plaintiffs had argued that options backdating had cost shareholders.
UnitedHealth will pay $17 million to resolve another suit related to the Employee Retirement Income Security Act.
CalPERS and attorneys who follow such settlements said they believed the $895 million was the largest in an options- backdating class action.
Other recent settlements include $160 million last month between Brocade Communications Systems Inc. and shareholders and a $117.5 million settlement between Mercury Interactive Corp. and shareholders last October.
