By Bruce Schreiner, The Associated Press
and Amy Higgins, The Cincinnati Enquirer

Louisville-based Humana Inc. said Thursday it will cut about 2,300 jobs, or 17 percent of its work force, in a move to accelerate growth as it relies more on technology to serve members.

The managed-care company said it will close customer service centers in Jacksonville, Fla.; San Antonio, Texas; and Madison, Wis., totaling more than 900 of the job cuts. The rest of the cutbacks will occur across the company - including 30 of the 500 jobs in Cincinnati.

The consolidation will leave Humana with service centers in Cincinnati; Green Bay, Wis.; Puerto Rico; and Louisville, its headquarters.

Humana said the job cutbacks will occur by the end of next year.

Michael B. McCallister, Humana's chief executive, said the announcement "reaffirms our commitment to improving and growing profitable commercial business by streamlining our cost structure."

The company's profit rose 20 percent in its latest quarter, and its commercial membership for the year was up 88,000 by Oct. 31.

Humana has 380,000 members in Cincinnati through its Humana and ChoiceCare product lines.

Humana bought Cincinnati-based ChoiceCare in 1997 and services employees of Cincinnati's largest employers - including Procter & Gamble, General Electric, Cinergy, Hamilton County and Cincinnati Public Schools.

"Humana is growing, and today's announcement will enable us to grow more quickly," Humana spokesman Tom Noland said.

Steve O'Neil, an industry analyst with Hilliard Lyons in Louisville, said Humana's profits from its commercial business are up for the year but dipped in the third quarter.

"They are trying to sustain the profitability of their commercial segment," Mr. O'Neil said. "The technology may have allowed them to become more efficient in some areas."

Mr. O'Neil said the cutbacks also would give Humana "a cushion in the event that they cannot achieve the premium rate increases that they have in the past few years."

Mr. Noland said Humana's technology advances in customer services enabled it to close the three service centers.

Instead of calling service representatives, Humana customers have the option of tapping the Internet to get health-plan information; or they can call a number to get a computer-generated, voice-activated response.

"Because of advances in technology, we are able to serve our members more efficiently now than we were before, which enables us to have fewer locations to serve them from," Mr. Noland said.

The service centers will close by June 30, he said.

The closings will eliminate about 450 jobs in Jacksonville, about 345 in San Antonio and about 125 in Madison, Mr. Noland said.

While the restructuring will initially cost Cincinnati 30 jobs, the closure of those other service centers might eventually create more jobs locally.

The office that now services just Southwest Ohio and Northern Kentucky will expand its reach as the other centers close, Humana spokesman Jeff Blunt said.

The company said it will take pretax charges of $100 million to $145 million as a result of the cutbacks.

It expects to record $75 million to $110 million of those charges in the current fourth quarter, including all of the severance charges.