Walnut Creek, Calif.-based John Muir Health has shared plans to lay off 75 employees, or approximately 1% of the system’s workforce.
The layoffs mainly affect leadership positions, administrative services employees and those that do not provide direct patient care, according to a Sept. 1 news release shared with Becker’s.
The hospital said the reductions aim to compress layers in the system to accelerate decision-making and speed implementation of strategic initiatives.
“The layoffs also reflect the current healthcare environment with lower patient volumes and revenues, as well as increased expenses for labor, pharmaceuticals and supplies,” the release said. “In addition, John Muir Health is proactively preparing for future expenses. California’s 2030 seismic mandate is an unfunded requirement that will cost John Muir Health more than $2 billion in additional facility upgrades.”
John Muir Health said it has invested $1.2 billion in seismic safety, which includes new patient towers at its Concord and Walnut Creek medical centers. This capital investment, combined with HR 1 cuts and payments from government insurance programs like Medicare and Medi-Cal that are not meeting care costs have forced the financial decision, the release said.
While the locally governed, independent and nonprofit system has a strong overall financial balance sheet, it said it is taking these steps to ensure long-term viability.
Affected employees were given more than 60 days notice and will receive pay and benefits through Oct. 28. Those that do not find another position at John Muir will receive a severance package offer.
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