UnitedHealth Group stock drops as CEO Witty abruptly resigns and company suspends financial outlook

Andrew Witty is stepping down as CEO of health care giant UnitedHealth Group in a surprise transition that follows a period of unprecedented turbulence, including the public killing of a company executive and financial woes that in recent weeks have only intensified.

Witty is leaving for personal reasons, the company said, and will remain as a senior advisor.

He will be replaced as chief executive by former CEO and longtime company leader Stephen Hemsley, who has been serving as board chair since 2017.

UnitedHealth suspended its financial guidance for the year, and its stock price was down more than 13% in early trading Tuesday. The company employs some 400,000 people, including 19,000 in Minnesota.

The shakeup at the top of Minnesota’s largest company comes at a remarkably difficult time, just over six months after the fatal ambush of UnitedHealth Group executive Brian Thompson on a sidewalk in New York City and weeks after a one-day stock sell-off driven by deteriorating results wiped out $120 billion in the company’s market value.

Shares in the Eden Prairie-based company have fallen even further since the 22% stock plunge on April 17, which stemmed from higher-than-expected use of medical services in the company’s massive UnitedHealthcare health insurance business as well as within Optum Health, a fast-growing division that runs a national network of outpatient medical centers.

On Tuesday morning, with the share price plunging further even prior to the official market opening, UnitedHealth Group held an impromptu call with investors to explain why it was discontinuing its financial forecast for the remainder of the year.

“I’ll start by conveying on behalf of the UnitedHealth Group board, our fellow employees and myself, our deepest thanks and appreciation to Andrew Witty for his leadership of this company, a vital role he played with real integrity and compassion during one of the most difficult periods any company could endure,” Hemsley told investors. “We understand his decision and I’m grateful he has agreed to serve as a senior adviser to me.”

The company said it was suspending its 2025 outlook as care activity continued to accelerate while also broadening to more types of benefit offerings than seen in the first quarter. Medical costs of many Medicare Advantage beneficiaries new to UnitedHealthcare remained higher than expected, UnitedHealth Group said, adding it expects to return to growth in 2026.

Hemsley, 72, is an accountant by training. He joined the company as chief operating officer in 1997 and became president two years later, serving beside Dr. William McGuire, the visionary CEO who left the company in 2006 amid a scandal over stock option pricing. With McGuire’s departure, Hemsley stepped in as chief executive and held the job until 2017, a timespan that saw remarkable growth.

Witty, 60, became chief executive of UnitedHealth Group in 2021 and shortly thereafter named Thompson as CEO for the company’s health insurance business. Previously the top executive at pharmaceutical giant GlaxoSmithKline, Witty started his career at UnitedHealth by running the company’s Optum division, which sells a variety of health care services including pharmacy benefits management and health care data consulting.

Early in the COVID-19 pandemic, Witty stepped away from company leadership to work on the development of vaccines at the World Health Organization. After returning and becoming CEO, he was the public face of an enormous company during a remarkably difficult 2024, which included a Congressional grilling over how the company handled a cyberattack at its Change Healthcare subsidiary.

It was Witty who stepped on stage to suddenly close the company’s investor conference in December, as word spread of Thompson’s killing. In the following days, he issued a moving video message to workers, calling the tragedy immeasurably sad and profoundly shocking while encouraging colleagues to take time for family.

“Leading the people of UnitedHealth Group has been a tremendous honor as they work every day to improve the health system, and they will continue to inspire me,” Witty said in a statement Tuesday morning.

Despite the recent stock plunge, UnitedHealth remains a huge force in the nation’s health care economy, with its most recent quarter featuring revenue of $109.6 billion and a profit after adjusting for one-time factors of $6.16 billion.

UnitedHealth published a news release on the CEO change at 5:30 a.m. CT and held a conference call with investors 90 minutes later to discuss next steps. Witty was not on the call, in which Hemsley and chief financial officer John Rex addressed questions about the abrupt transition and next steps.

Hemsley said he was deeply disappointed in, and he apologized for, recent setbacks in financial performance, which he described as involving both external and internal challenges.

UnitedHealthcare is continuing to see greater health care spending, Rex said, for seniors who are new to its Medicare Advantage health plans, which are a privatized version of the federal government’s health insurance program. Plus, there’s continued acceleration of medical cost trends across all Medicare Advantage enrollees and follow-on impacts in other parts of UnitedHealth Group.

Hemsley said he remained confident in the company’s strategy built on “value-based care” initiatives, meaning health plan contracts with financial incentives for doctors and hospitals to provide better care at lower total cost. The new CEO also pledged UnitedHealth Group would “understand, in a more precise level, exactly what’s going on” with the recent performance failings.

“I am humbled to return to the mission of this company and to the thousands of employees dedicated to that mission,” Hemsley said. “I have every confidence in the leadership team and the capacities of this enterprise to continue to create and pursue significant opportunities to make substantial contributions to healthcare in this country and to return to our long-term growth expectations.”

He added: “I hope that people understand that there are a whole host of remedial responses in motion across this enterprise on both the UnitedHealthcare side and the Optum side. So, we are gaining momentum on these things.”

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