Calais (Maine) Regional Hospital, which filed for bankruptcy in September, will cut about 10 percent of its workforce to help stabilize its finances amid the COVID-19 crisis, according to The Bangor Daily News.
The 25-bed critical access hospital said that the reduction will occur through layoffs, attrition and reorganizing positions in the organization. About 40 percent of the employees affected work in high-level or management positions.
Leadership changes will be made by May 8, according to the report. Staff that are not in high- level or management positions will be asked to leave voluntarily before mandatory layoffs occur.
The hospital expects to save about $2 million annually by the reduction in workforce, according to the report.
The hospital said that the COVID-19 pandemic has significantly affected its operations and it expects to run out of cash to support operations by early June without more federal support.
Calais Regional received $623,000 in federal stimulus funds through the CARES Act to help offset a revenue drop from the pandemic, but it is not eligible for financial assistance through the federal Paycheck Protection Program because it is in bankruptcy.
Without funds from the federal Paycheck Protection Program funds the hospital may be "forced to immediately close its business," the hospital warned in a lawsuit filed April 27.
In the lawsuit, Calais Regional accuses the U.S. Small Business Administration of violating the law by discriminating against its status as a debtor and not allowing it to access the funds, according to the report.