FHP Lays Off 230 Workers in Cost-Containment Move : Health care: The Fountain Valley-based HMO will cut 140 jobs locally. Administrative ranks are hit hard by reductions.

FHP Inc. said Friday that it is laying off 230 employees, including 140 who work in the large health maintenance organization’s Orange County and Long Beach region.

The layoffs, effective immediately, struck hardest at the administrative level. FHP said it cut 100 jobs at its Fountain Valley headquarters alone.

The staff reduction, the company said, was precipitated by cost-containment efforts by the federal government, which is allowing only minimal increases next year in what it will pay for the care of Medicare recipients. Employee groups are putting pressure on the company, too, to lower its premiums.

“Our largest customers--the federal government and employer groups--are demanding that we continue to control our expenses,” Executive Vice President Jack Massimino said. “FHP must be proactive regarding the inevitable changes in the health care industry.”

The cuts are being made systemwide in the organization, which employs 11,000, company spokeswoman Ria Carlson said. In addition to California, FHP operates in Nevada, Arizona, New Mexico, Utah, Colorado, Guam and Saipan.

Because the cuts are being made in the administrative ranks, none of the company’s 850,000 customers are likely to notice any difference in the level of service, Carlson said.

All of the employees laid off Friday will receive severance pay, counseling and help finding new jobs, Carlson said. They will also be able to to apply for other jobs in the FHP system.

The stock of FHP’s parent company, FHP International, gained 12 cents a share Friday to close at $25.67 in Nasdaq trading.