UnitedHealth Group has restricted employee pay increases to a range of 0 to 2% this year, with adjustments tied to performance. Bloomberg reported, citing sources.
The limited raises coincide with layoff notifications to an unspecified number of staff, according to the report.
The US-based conglomerate is taking steps to reduce operating costs, reduce the scale of its clinic network and strengthen profits at underperforming health plans and medical groups.
Its insurance division is forecast to lose up to 2.8 million members.
According to the report, that segment also plans to reduce operating expenses by nearly $1 billion this year, in part through broader deployment of AI.
The group’s outlook in January suggested revenue could decline this year for the first time since the 1980s.
Forecasts for 2026 point to revenue exceeding $439 billion, a 2% drop attributed to “planned company-wide right-sizing.”
Operating profits are projected to exceed $24 billion, with an expected net margin of around 3.6%, compared to 2.7% reported for 2025.
Executives have previously indicated that the group would sell or close around 550 clinics within its Optum Health division.
UnitedHealth is looking to rebound from a sharp drop in profits last year.
Stephen Hemsley, longtime chairman and former CEO, returned to the top job in 2025 to lead the turnaround effort.
The company is also under pressure from a Trump administration proposal to curb payments for private Medicare Advantage plans, where UnitedHealth is the largest provider with more than eight million members at the end of the year, the report added.
UnitedHealth Group reported lower profits for 2025, citing reductions in Medicare funding and costs related to the Change Healthcare cyberattack.
Net earnings attributable to common shareholders fell 16% to $12.1 billion from $14.4 billion a year earlier, and the company also noted an “acceleration in medical cost trends.”
For the fourth quarter, net earnings attributable to shareholders amounted to $10 million, compared to $5.5 billion in the same period a year earlier.
“UnitedHealth Limits Pay Raises to 2% During Restructuring: Report” was created and originally published by Life Insurance International, a brand owned by GlobalData.
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