Signify Health is laying off nearly 500 employees, beginning Oct. 1.
The value-based care technology company notified the Connecticut Department of Labor it planned to cut 489 employees, including 147 who work in one of the company’s five offices and 342 who work remotely.
The letter was sent as a requirement of the Worker Adjustment and Retraining Notification Act. Signify, which has an office in Norwalk, Connecticut, is based in Dallas.
A spokesperson for Signify Health said some employees would be reassigned to other roles within the company.
News of the pending layoffs comes as the company may be scooped up by a healthcare behemoth.
CVS Health is planning to make a bid for the Dallas-based company, according to a report in The Wall Street Journal. Signify Health’s CEO, Kyle Armbrester avoided the topic entirely during the company’s quarterly earnings call on Aug. 4.
“Regarding recent media reports, focused on potential M&A, we do not comment on market speculation and we will not answer questions on the topic,” Armbrester said.
According to the letter sent to the state, the reduction in force is tied to the company exiting its episodes-of-care segment, in which it partnered with payers to participate in value-based care programs. During the earnings call, Armbrester said the company’s $490 million second-quarter net loss was due to the winding down of the segment and a decrease in the company’s stock price.
Signify said it is exiting that segment, particularly because CMS reduced Medicare episode payments for its Bundled Payments for Care Improvement-Advanced program. This in turn reduced the chance for savings, according to the company.
Instead, Armbrester said the company will focus on its home and community services segment, which comes on the heels of its February acquisition of Caravan Health.
“We’ve got a good pipeline of organizations and companies that we’re engaged with. I mean, I think our focus on acquisitions [are companies that] have out the gate synergies,” Armbrester said. “What we’re really excited about Caravan is that we landed integration materially in three months.”