UnitedHealth Group’s (NYSE: UNH) payvider arm, Optum Health, will lay off 572 employees in early 2026, according to WARN notices the company filed in New Jersey. All of its behavioral health services in the state will stop effective Nov. 30.
Other areas affected include pediatrics and specialty care.
The layoffs are slated to begin on Feb. 2, 2026, and will continue into early March. According to the filings, Optum Care will lay off 390, Optum Medical Care will lay off 122, 49 employees will be laid off from Optum Services and its select management team will lay off 11.
“As part of our commitment to making health care more affordable, we regularly review our services, footprint and staffing levels to ensure they meet the needs of the people we serve, our business and evolving market dynamics,” an Optum spokesperson told Behavioral Health Business.
A surge in medical costs tied to behavioral health utilization has created financial headwinds for UnitedHealth Group this year. During both its second- and third-quarter earnings calls, the company identified behavioral health as a driver of increased medical costs.
Still, its most recent earnings report shows Optum’s revenue up 8% year-over-year, but notes that the growth is primarily driven by its pharmacy services line, Optum Rx.
What’s more, a recent HealthAffairs analysis found that Optum’s workforce of more than 90,000 physicians are paid on average 17% more by UnitedHealthcare than other providers. In areas where the health care giant has a market footprint of 25% or higher, these clinicians typically receive payments that are 61% higher.
The analysis examined price transparency data across 14 CPT codes, more than 385,000 transactions, with 705 of those instances directly between United Healthcare and Optum. The company has disputed the findings, according to Fierce Healthcare.
However, the research “suggests that intercompany transactions within health care conglomerates may warrant scrutiny, as they may be signals of regulatory gaming or attempted foreclosure,” the analysis authors wrote of their findings.
In the context of the newly announced layoffs across New Jersey, this suggests that despite higher reimbursement rates, the service mix in this region was not meeting certain targets. The move also raises questions about the viability of behavioral health lines in the context of large, vertically-integrated systems.
Employees impacted by Optum’s pending layoffs will be given “job placement resources” and others will be redeployed to “suitable open roles within the company,” the spokesperson confirmed.
As for patients, the company said it will provide “clear information and support to our patients to ensure uninterrupted care.”
“Members with behavioral health benefits managed by Optum through their health insurance plan will continue to have access to covered services through their plan’s network of behavioral health providers,” Optum’s spokesperson said.
The layoffs are the latest in a string of behavioral health providers cutting staff. In October alone, pediatric mental health provider Hazel Health laid off 11% of its staff, followed by 154 employees who were let go at Michigan-based youth mental health and social services’ nonprofit Vista Maria. Acadia Healthcare (Nasdaq: ACHC) announced layoffs of 400 employees in the wake of multiple facility closures. On top of that, Arizona-based Buena Vista Recovery recently disclosed that it will lay off 202 employees.
Yet, this wave of layoffs is not unique to the behavioral health sector. Across the U.S., 2025 has seen the most layoffs in five years – since the economic stress brought by COVID-19 in 2020 – according to some reports.
But for a sector already plagued by continuous workforce shortages, cutting behavioral health staff at a time when utilization and demand for these services are rising, this could lead to heightened burnout among those who remain, longer patient wait times and access issues in some instances.