California hospital plans for 677 layoffs

Watsonville (Calif.) Community Hospital is preparing to lay off 677 workers, according to a notice filed with the state Nov. 29. 

Hospital CEO Steven Salyer said in early November that the 106-bed facility would close in late January without a buyer. The hospital entered Chapter 11 bankruptcy Dec. 5 and announced a tentative sale agreement had been reached with the Pajaro Valley Healthcare District Project. The nonprofit group has agreed to act as the stalking horse purchaser of the hospital, according to bankruptcy documents. 

If the sale to the nonprofit group or another buyer is finalized by Jan. 28, all 677 employees will be terminated by Watsonville Community Hospital. "We are asking potential buyers to offer employment to our employees," Mr. Salyer said in the notice to the state. 

If a sale isn't finalized, the hospital will close after the bankruptcy court authorizes those steps, and all employees would be terminated Jan. 28, according to the notice to the state. 

"The hospital is saddened to have to take this step but remains hopeful that the sale will go through, and that the hospital will be able to continue serving the community," Mr. Salyer said. 

Funds made available through the bankruptcy process may allow the hospital to delay the layoffs. Through the process, the hospital said it has received funding to support its operations and the sale process through the end of March. 

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