UnitedHealth Group announced that CEO Andrew Witty is stepping down due to personal reasons, and the company is forced to suspend its financial outlook for 2025 due to unexpectedly high medical costs.
Chairman Stephen Hemsley has been appointed as the new CEO with immediate effect. Hemsley, who previously served as the CEO of UnitedHealth Group from 2006 to 2017, will continue as the chairman of the company’s board, while Witty will take on the role of senior adviser to Hemsley.
Driving the news: The company has faced challenges recently, including the tragic incident in December where executive Brian Thompson was targeted and killed outside a New York City hotel. Despite the incident not being related to the company’s financial operations, UnitedHealth’s shares have taken a severe hit since then.
- Hemsley acknowledged the setbacks faced by the company, both internally and externally, and expressed optimism about overcoming these challenges through humility, rigor, and urgency. He shared his belief in the company’s capacity to resolve these issues and remain confident about its future.
- Witty, 60, joined UnitedHealth in 2018 after serving as the CEO of GlaxoSmithKline. Under Witty’s leadership, UnitedHealth experienced significant growth, with total revenue surpassing $400 billion in the last year, marking a 55% increase from before Witty became CEO.
- Despite UnitedHealth’s impressive growth under Witty’s tenure, the company has encountered setbacks in the past five months, notably due to the national focus on Luigi Mangione, indicted for a federal murder charge related to Thompson’s killing.
Zoom in; UnitedHealth lowered its 2025 forecast following its first quarterly earnings miss in over a decade.
- Ultimately, the company withdrew its financial outlook entirely due to higher-than-expected medical costs resulting from new Medicare Advantage members.
- UnitedHealth’s stock has plummeted by 38% since Thompson’s tragic incident, with a more than 16% decrease on Tuesday, reaching levels last seen almost five years ago. This decline also affected other major insurers like Elevance, Humana, and Cigna, which saw drops between 4% and 7%.
