Hospital layoffs have escalated in the fourth quarter as health systems address balance sheets that have been eroded by recent operating losses and react to ongoing financial and workforce pressures.
Health systems continue to see high labor and supply costs, and average operating margins dropped in September as organizations embarked on new capital projects, according to Kaufman Hall's latest "National Hospital Flash Report." While operating margins improved gradually this year, about 40% of hospitals are still operating in the red. Additionally, while contract labor rates are dropping, the overall labor market remains tight.
Workforce cuts are also rising to the C-suite as health systems eliminate certain leadership positions to reorganize their operating structures into more efficient models.
These efforts are designed to stabilize health systems' financial positions while they prepare for future growth and challenges. Financial resilience and long-term sustainability are also top of mind for leaders as recovery efforts continue after a tumultuous few years.
Here are 10 hospitals and health systems that have reported workforce cuts in the fourth quarter:
Editor's note: This is not an exhaustive list.
1. Chapel Hill, N.C.-based UNC Health laid off about 40 leadership-level employees across the organization, equating to fewer than 2% of its leaders. UNC said it is moving to "a more contemporary and sustainable leadership structure" that ensures it has the right number of leaders overseeing front-line teams. No C-suite roles were affected by the layoffs, a spokesperson for the health system told Becker's.
2. Indianapolis-based Indiana University Health is overhauling its operating model, reducing six regions to four, and eliminating various mostly nonclinical leadership positions. About 100 positions are being cut, and others are being created or restructured to better align with growth plans, a spokesperson for IU Health told Becker's.
IU Health is "adjusting our regional structure" to bolster clinical care models, make investments in technology and to "improve talent pipelines and career pathways for team members," President and CEO Dennis Murphy said
3. Springfield, Mass.-based Baystate Health recently eliminated 134 leadership positions as part of a larger plan to reverse $300 million in operating losses. The changes are part of a broader effort to save $225 million over two years and improve efficiency by reducing management layers. While some affected leaders will transition to new roles,
"We streamlined decision-making so it wasn't confusing and how to get things done, especially for those at the bedside," President and CEO Peter Banko told Becker's. "We're engaging the entire organization and talking about why have we historically been successful, what is our view of the world over the next five years through 2030, and then how do we create a clear financial and strategic plan to map out how to get there."
4. Westchester Medical Center Health Network, a nine-hospital system headquartered in Valhalla, N.Y., is eliminating two regional CEO positions amid changes to its operating structure. The moves are part of a larger restructuring that saw WMCHealth lay off about 130 employees primarily in corporate and administrative roles. No patient-facing roles were affected.
WMCHealth's new operating structure will appoint full-time leadership positions to oversee operations at each hospital and report directly to the health system's senior leadership. The move aims to realign WMCHealth's operations by centralizing services to better leverage the strengths of its entire network and "ensure the long-term health of our hospitals," a spokesperson for the system told Becker's.
5. Pittsburgh-based UPMC is laying off about 100 employees, 0.1% of its workforce, to improve efficiencies and eliminate redundancies. About 200 unfilled positions and 100 active employees across the system will be affected.
A UPMC spokesperson declined to answer additional questions about the types of positions affected and the timeline. The layoffs come months after UPMC announced plans to lay off about 1,000 employees, primarily in nonclinical, administrative and non-patient-facing roles.
6. Pontiac (Mich.) General Hospital plans to lay off 248 employees after CMS found it was not in compliance with several Medicare conditions of participation and will halt payment for impatient services on or after Nov. 24.
Affected positions include registered nurse supervisors, pharmacy techs, nurse managers, lab assistants and registered pharmacists.
"Pontiac General … believes that this exclusion from receiving Medicare funds is temporary and will last for less than six months, and thus the layoffs are not expected to be permanent," the WARN notice said. "Pontiac General does not anticipate that the entire facility will be affected and that there will not be a complete shutdown of the facility."
7. Flint, Mich.-based Insight Health System plans to lay off an unspecified number of workers at Trumbull Regional Medical Center and Hillside Rehabilitation Hospital — both in Warren, Ohio — after acquiring the hospitals from Dallas-based Steward Health Care in October.
"As our patient volumes continue to increase, positions will be brought back," a spokesperson for Insight told Becker's. "The hospitals continue to work with the bargaining units and our employees to identify other opportunities available to those affected as we are currently hiring in needed areas."
8. Cooperstown, N.Y.-based Bassett Healthcare Network eliminated 100 administrative jobs in October to address an $80 million loss in 2022 and a similar loss last year. The positions were all occupied and primarily administrative, according to hospital officials. No direct patient-facing roles were affected and there is no plan for further layoffs
9. Grand Blanc, Mich.-based McLaren Health Care plans to lay off 43 workers as it closes McLaren Bay Special Care, a long-term acute care hospital. The health system shared plans in late October to close the hospital Dec. 22 and build a multispecialty outpatient campus. McLaren is offering affected hospital employees other positions in the organization, a spokesperson for the system told Becker's.
10. Coniva, Calif.-based Emanate Health is laying off 107 employees. Sixty-three of the layoffs will draw from per diem, part-time and full-time positions across the system, and the remaining will come from the permanent closure of Emanate Health Home Care and Emanate Health Imaging, effective Dec. 9. Affected positions include vice president of supply chain, assistant director of marketing and growth, managers, and corporate director of safety and security.