A recent presentation at a Public Finance and Audit Committee meeting provided details about Portland-based Oregon Health & Science University's proposed budget for fiscal year 2025, including its plans to lay off at least 500 employees as part of ongoing strategic alignment work.
The meeting occurred on June 21, about two weeks after OHSU notified staff of the layoff plans, citing financial challenges.
"For a community of healers, whose work every day is focused on advancing the health and well-being of Oregonians and beyond, identifying reductions in force has been excruciating. But fallout from the global pandemic has continued to take its toll on our workforce and budget. Our expenses, including supplies and labor costs, continue to outpace increases in revenue," OHSU said in a statement shared with Becker's on June 24.
"Despite our efforts to increase our revenue, our financial position requires difficult choices about internal structures, workforce and programs to ensure that we achieve our state-mandated missions and regain our footing over the long term."
According to the June 21 presentation, OHSU's fiscal year 2025 budget targets revenues of $5.5 billion and a $25 million deficit for a -0.5% operating margin. Among strategic alignment principles in the fiscal year 2025 budget are making permanent layoffs, largely in non-patient facing areas and focusing first on administrative and support positions, along with reductions in non-essential programs that are not fully funded. This is expected to result in approximately $75 million in savings.
Through its strategic alignment work, OHSU aims "to shift our overall strategy to ensure the highest and best use of the services that distinguish OHSU from others and on which Oregon depends," the presentation said.
The layoffs largely affect administrative roles, with the largest percentage reductions in central services such as communications, marketing, human resources and finance areas.
OHSU has not determined the exact number of affected individuals. However, the health system expects the reductions in force — combined with annual non-renewal notices that have been issued — will amount to more than 500 layoffs (around 2.5% of OHSU's workforce) in a 90-day period, triggering Worker Adjustment and Retraining Notification Act compliance.
On June 7, OHSU issued a Worker Adjustment and Retraining Notification notice to the state, indicating that it intends to implement a permanent layoff of some employees on or after Aug. 9.
"At this time, OHSU is not renewing the contract of 142 employees whose jobs are being permanently eliminated as part of its annual renewal process," the notice states. "This does not independently trigger the required WARN notices, but because of its strategic realignment process, OHSU anticipates additional permanent layoffs within the next 90 days. As these permanent layoffs are identified, OHSU will provide a supplemental notice."
Willamette Week was first to report OHSU's plans to lay off hundreds of workers, which follows OHSU and Portland-based Legacy Health signing a binding, definitive agreement to come together as one health system under OHSU Health.
The full OHSU board is scheduled to consider and vote on the organization's proposed budget at its June 28 meeting.