Operational Excellence

March 16, 2009

Kaiser Permanente Statement on IT Workforce Reductions

As a result of our agreement with IBM, about 700 positions in Kaiser Permanente’s data center operations will be eliminated. Some of the affected employees will be eligible for employment with IBM, and we are working with IBM to transition as many employees as possible.

Separately, Kaiser Permanente also is taking the difficult step of eliminating an additional 160 positions at more than 30 locations across its eight regions, as part of a realignment of its Information Technology function. “This step is necessary to enable us to operate as efficiently as possible during these extraordinary and challenging times,” said Phil Fasano, chief information officer for Kaiser Permanente. “Making decisions like these that affect employees is never easy. However, like many other organizations, due to the slowing of the economy, we are slowing our growth in IT expense which has resulted in elimination of positions.”

In total, roughly 860 employees will be affected by today's announcements. No clinical positions have been eliminated.

Employees whose positions are eliminated, either today as part of the realignment or in the coming months through the IBM partnership agreement, will receive a 60-day notice of position elimination. During this period, the employees will receive full pay and benefits. At the end of 60 days, employees will be eligible to receive severance benefits, including continued Kaiser Permanente group health benefits. The average severance benefit for these employees is six months, depending on length of service, meaning the average employee notified will continue to have pay and benefits for eight months following notification. In addition, Kaiser Permanente provides comprehensive re-employment, career and personal counseling services as part of its outplacement services.