MINNEAPOLIS — Minneapolis-based health insurer UCare is cutting its workforce by nearly 250 people.

The Star Tribune reports UCare is cutting its workforce by about 27 percent — including layoffs for 200 people and voluntary severance for another 45.

The moves, announced Monday, follow UCare’s announcement Friday that the company will drop its lawsuit against the state for not renewing its contracts to cover hundreds of thousands of low-income residents.

In a statement, UCare chief executive Jim Eppel called the cuts “a very difficult process for all of us across the organization.”

The state contract accounted for about half of UCare’s $3 billion in revenue last year. The HMO continues to sell policies to Medicare beneficiaries and people buying through the MNsure health insurance exchange.