LOS ANGELES, July 28 (Reuters) – Health insurer Aetna (AET.N: Quote, Profile, Research) on Friday said it would spend $219 million to expand its Hartford, Connecticut campus and hopes to increase the number of employees there to 6,400 from 2,800 now by 2010.
Connecticut state officials are providing Aetna with financial incentives to support the expansion of its headquarters, the company said.
As part of that deal, Aetna has agreed to maintain a minimum of 7,000 employees in Connecticut for the next five years. The company plans to move most of the employees from its Middletown, Connecticut facility to Hartford.
Although Aetna is spending money on the Hartford campus, the move is part of a strategy aimed at saving money, company spokeswoman Cynthia Michener said in a statement.
She explained that consolidating employees will improve the efficiency of business operations, while providing significant cost savings over time. Real Estate expenses associated with leasing or owning office buildings is the third highest annual expense at Aetna, costing around $200 million per year.
The company said it has been actively consolidating office space around the country wherever it makes sense, including Pennsylvania, Florida and California.
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