80 Fired at Apria’s Costa Mesa Headquarters

Apria Healthcare Group Inc. last week fired 80 employees at its Costa Mesa headquarters as part of a cost-cutting program to make the provider of home health care services profitable by mid-1999.

Apria also has fired an undisclosed number of field staff and plans to dismiss “hundreds” more of its 7,500 employees, taking a third-quarter charge, the company’s new chief executive, Philip Carter, said in an interview.

“There is an abundance of excess and extravagance,” said Carter, who was named chief executive in May. “The objective is to have the house in order by the end of this year. The house has to be clean.”

Apria Chairman Ralph Whitworth this spring ended a fruitless yearlong search for a buyer. He replaced most of the company’s board and said the company will remain independent.

Carter, 50, took on the task of turning around the company, which lost $270 million last year as the government and health insurers cut fees they’re willing to pay for oxygen, intravenous supplies and other medical equipment Apria delivers to homebound patients.

Carter said his goal is to make Apria profitable by the second quarter of 1999 through “substantial reductions” in costs in the home office and field offices.

While the company will continue to focus on oxygen, intravenous and home medical equipment, it will get out of businesses or regions where it’s not making money, he said.

The firings last week included several senior executives, said Carter, who declined to elaborate. Staff reductions and costs associated with pulling out of unprofitable operations will result in a third-quarter charge, Carter said. He wouldn’t say how large it will be or discuss earnings projections.

Once Apria has trimmed costs and developed a “correct” model, it will begin a rapid expansion program, focused on acquiring suppliers of oxygen and home medical equipment, he said.

“There will be considerable consolidation” in the home health care industry, Carter said. That will give companies more clout to regain control of their business from the government and insurers, he said.

Apria shares fell 25 cents Tuesday to close at $5.88.