Clover Health has cut 10% of its workforce as part of a restructuring aiming to help the company on its path to profitability.
The company announced Monday that it conducted an independent reduction-in-force that was designed to better align its selling, general and administrative expenses with revenue. Clover said it will continue to "deliver additional efficiencies" as it streamlines operations.
In addition, Clover announced it will move its core health plan operations to UST HealthProof's platform, which executives said will enable the company to deliver greater savings and improve operations for its core Medicare Advantage plan.
“Our focus at Clover is helping physicians detect and treat disease sooner via Clover Assistant,” said Andrew Toy, CEO of Clover. “Our partnership with UST HealthProof will allow us to rapidly improve the efficiency of non-strategic core MA operations and greatly reduce our administrative costs."
"We’re absolutely focused on delivering a sustainable, profitable Clover Heath to our members and investors, and this is a huge step in that direction," Toy said.
The insurer expects the restructuring and outsourcing to generate $30 million in net annual savings beginning in 2024. Clover said it will incur a charge of between $7 million and $9 million in the first half of the year to implement UST HealthProof's technology and to roll out other organizational changes.
Clover Health went public in early 2021 and, like its peers in the insurtech space, has struggled to turn a profit. The company has circled 2023 as key in its path to profitability. The company posted an $84 million loss in the fourth quarter of 2022, slimming its losses from the prior-year quarter.