LANSING, Mich. (Michigan News Source) — Michigan’s largest health insurer is cutting jobs and reworking its payroll, as Blue Cross Blue Shield of Michigan seeks to shed $285 million in administrative costs by the end of the year.

How many job cuts?

Company officials confirmed June 12 that more than 1,300 jobs have been eliminated in 2025, including 220 layoffs, more than 400 open positions, and roughly 500 voluntary buyouts. An additional 250 contractor roles have also been cut since January.

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“We owe it to our customers and members to be responsible stewards of their money by looking inward and taking steps to lower our own costs,” Blue Cross said in a public statement. 

The changes come after two years of financial losses and as health care costs continue to rise. Blue Cross posted a $1.7 billion loss in 2024 and reported spending $3 billion more on medical and pharmacy claims than the year before.

Which company departments are impacted?

Tricia Keith, who became CEO in January, told staff in a memo the job reductions would affect “all areas of BCBSM.” She said no additional large-scale layoffs are expected this year but acknowledged that “additional actions” could still be needed to meet the company’s longer-term goals.

“It’s a lot better than tapping people on the shoulder and saying, ‘Thank you for your service,’” Keith told The Detroit News in February, referencing the company’s buyout strategy.

Keith is overseeing a three-year effort to cut $600 million in administrative expenses. The company says it saved more than $200 million last year through similar efforts and internal adjustments.

Executive positions are on the chopping block, too.

Executive cuts have also been made. The number of leadership roles is down 13% since January 2024, and executive incentive payouts were also reduced by 13% this year, Keith said.

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Employees affected by the cuts are receiving severance, benefit extensions, and transition assistance based on years of service. Blue Cross did not specify which offices or departments were most impacted, but the reductions span across the organization, including positions in Detroit, Lansing, and Grand Rapids.

Notably, medical inflation has outpaced premium growth. Blue Cross says it now spends about $100 million per day on member care across the country—up $12 million per day from 2023. Last year, it raised premiums 11.5% for some Michigan policyholders.

“As a nonprofit mutual health insurer, we must manage our finances responsibly,” the company said in a statement. “Our administrative costs comprise nine cents of every premium dollar, and in this time when we are taking double-digit premium increases to our customers, we owe it to them to look inward and take steps to manage our own costs.”