UnitedHealth Group is holding most U.S. employees to pay increases of between 0% and 2% this year and has told some workers they are losing their jobs, according to people familiar with the internal decisions. The Minnetonka-based health-care heavyweight is tightening compensation as it tries to steady its finances after a rough 2025, with managers and HR leaders revisiting merit and bonus budgets across several business units.
As reported by Bloomberg, company leaders informed managers that raises would be capped in a range of 0% to 2%, and that an unspecified number of employees had already been notified of layoffs. Bloomberg, citing people familiar with the moves, said the cap is broad in scope and affects both merit increases and some bonus calculations for the year.
Company frames move as a cost discipline
UnitedHealth has set a 2026 revenue outlook of more than $439 billion and has signaled a renewed focus on cost-cutting after heavy hits in the fourth quarter, according to the company’s January 27 investor materials. In a January 27 press release, UnitedHealth Group said it is refocusing operations in an effort to restore margins.
Independent coverage has noted that UnitedHealth recorded roughly a $1.6 billion charge tied to the 2024 Change Healthcare cyberattack and related restructuring, a hit that helps explain the current push to clamp down on compensation costs (STAT).
Workers react and precedent
The company has leaned on workforce programs before when looking to trim expenses. In 2025, CNBC reported that UnitedHealthcare offered buyouts to some benefits employees and warned that layoffs could follow if enough people did not volunteer.
Employees posting on public forums now say many received only minimal merit increases during the latest cycle, with some reporting 0% raises in online threads, according to discussions on Reddit. Earlier Optum cuts have also drawn attention. Coverage of moves like Optum to Cut 364 Jobs shows that UnitedHealth has already been trimming staff in specific parts of the business over the past year.
Local impact in the Twin Cities
UnitedHealth is one of Minnesota’s largest private employers, and regional reporting has underscored its sizable footprint in the Twin Cities. The Star Tribune reported that roughly 19,000 UnitedHealth workers are based in Minnesota, a concentration that means pay caps and targeted layoffs could ripple through the broader local job market.
Local recruiters and economists have pointed out that when a major employer holds the line on raises for an extended period, it can cool hiring and dampen consumer spending in nearby communities, as workers rethink everything from job switches to weekend budgets.
Legal and practical fallout
Broader cuts also raise questions about federal layoff rules. Large job reductions can trigger notice requirements under the federal WARN Act, which typically calls for 60 days of advance notice to affected employees and local officials, although there are limited exceptions for unforeseeable business circumstances. The U.S. Department of Labor’s guidance on WARN details when notice is required and what liabilities employers can face if they fall short (DOL).
Employment-law specialists note that companies often try to manage the timing and size of reductions by using voluntary programs or narrowly targeted actions, which can lessen the odds of tripping WARN thresholds.
The newly announced pay cap is the latest signal that UnitedHealth’s cost-cutting program is reaching deep into its workforce as the company reshapes its operations. Investors, employees and local leaders are likely to watch closely how these measures unfold. This story will be updated as UnitedHealth or worker representatives provide additional details.
