NEW YORK, US - Aetna Inc on Wednesday said it expects to eliminate roughly 1,250 jobs by the end of March 2010, reflecting weak economic conditions and the potential impact of health care reform.

The third-largest U.S. health insurer said it is cutting about 625 jobs now, and expects to make a similar number of cuts by the end of the first quarter. Such cuts would reflect about 3.5 percent of its 35,500-person workforce.

Aetna also said it expects to merge some field offices to reduce real estate expenses, but is not exiting any markets as a result.

'The economic downturn has had a significant impact on our customers,' Chief Executive Ronald Williams said in a statement. 'In addition, we must prepare for the impact that health care reform and regulatory changes may have.'

Aetna expects to incur a $40 million after-tax charge, including $12 million for the initial 625 job cuts and $28 million to consolidate real estate leases. It expects to disclose the financial impact of the remaining job cuts later.

The Hartford, Connecticut-based company last December announced plans to cut 1,000 jobs, also citing the economy.

Last month, Aetna posted an 18 percent increase in third-quarter profit, but said flu-related medical costs could weigh on fourth-quarter results. It also characterized 2010 as a 'repositioning year.'

Aetna shares closed Wednesday down 6 cents at $29.21 on the New York Stock Exchange.