Aetna to cut up 3.5% of workforce

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NEW YORK (CNNMoney.com) -- Aetna announced it eliminated 625 positions Wednesday in the first of two rounds of job cuts that will reduce the health insurance giant's workforce by up to 3.5% by the end of the first quarter in 2010.

Aetna's CEO Ronald Williams said the company "must prepare for the impact that health care reform and regulatory changes may have on our business" in a prepared statement. He added that "streamlining our business now will enable us to improve our competitiveness and redirect resources to areas with a greater potential for future growth."

The health insurance provider employed 35,500 before Wednesday's eliminations. Aetna said it will provide eligible employees with severance benefits based on their length of employment and support programs such as outplacement services.

The company also said it will be consolidating its field offices to reduce real estate costs.

Aetna, which provides insurance for more than 36 million people, expects to incur $40 million in restructuring charges for both changes.

Last December, Aetna slashed 1,000 jobs, almost 3% of its workforce at the time.