'Back in the Black': Kaweah cuts 94 jobs, staff benefits in $98M savings plan

Visalia, Calif.-based Kaweah Health has embarked on a new strategy to cut costs after three years of financial losses totaling around $133 million, according to a Jan. 19 report in The Sentinel.

The strategy, dubbed "Back in the Black," focuses on cutting staffing costs. The health system aims to eliminate 94 positions through early January in addition to previously announced workforce reductions; the health system already eliminated 90 unfilled positions and lowered its workforce by 106 employees.

The job cuts could save $21 million, according to the report. The health system will also reduce overtime and cut shift bonuses to save around $11.4 million and stop contributing to employee 401K plans to save another $10 million, according to the report.

Contract labor is also on the chopping block. Kaweah has cut its contract labor expense by half since May 2022 and aims to keep ratcheting it down to hit 40 contract laborers by the year's end to realize $55 million annual savings. The health system estimates the cuts will create $98 million annual savings.

Kaweah has 76 days cash on hand, according to CEO Gary Herbst, who described the situation as "dire" but not without a solution.

"I'm confident that the things we're doing and the additional things we will do will stem the tide so to speak," he told The Sentinel. "It's going to be a long road to recovery without a doubt. It's going to take several years to get back to where we were pre-pandemic."

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