FHP to Cut Its Corporate Staff as Growth Slows : Layoffs: The firm’s chief executive officer said anticipated gains failed to materialize in the face of the economic lag.

Blaming a tepid Southern California economy for modest membership growth, FHP International on Monday confirmed that it would cut its corporate staff by 14%, but the company vowed to maintain its medical staff at current levels.

Orange County’s second-largest health-maintenance organization laid off 60 of the 881 people at its Fountain Valley headquarters and said it will leave another 60 positions vacant.

The cutback comes on the heels of a layoff of an additional 60 people who report to FHP’s regional office in Cerritos. They worked in Long Beach, Cerritos and Orange County.

All of the positions are administrative, and they span the ranks of secretarial, technical and management employees, spokeswoman Anna Marie Dunlap said. The company does not plan to reduce the number of those who provide medical services, such as doctors and nurses.

“We expected our growth to be in excess of what it was and our plans were all built around that; our hiring was based on that,” said Westcott Price, FHP’s chief executive officer.

Membership in the company’s commercial division, which offers health services through employers, grew 7.8% in California in the 12 months ended Sept. 30, Price said. And senior-plan membership, which is a Medicare substitution program, grew 18% in the same period.

Price said growth was less than the company had projected, but he would not give out numbers. He blamed the lower figures on the Southern California economy.

The company reported total membership of 643,000 at the end of September.

Employees at FHP’s corporate office were told on Friday that their jobs had been eliminated. Regional layoffs were announced Nov. 1.

FHP is barred from expanding into northern Ventura County, Santa Barbara and Northern California until an investigation is completed. The federal Health Care Financing Administration, which regulates Medicare, is investigating allegations that FHP used illegal sales practices to attract senior citizens.

However, Price said, the inability to expand its geographic area has not affected FHP’s fortunes to date because the expansion was planned for later this year and early next year. He said effects will be felt “in a month or two.”

The government investigation, which began in July when federal regulators visited FHP offices in Fountain Valley and Cerritos, among others, is looking into charges that the company misled senior citizens about its program when asking them to sign up. FHP has said the problems were the work of isolated sales people.

Price said he does not know when the government might end its investigation.