Mayo Clinic furloughs, cuts hours of 30,000 employees to help offset $3B in pandemic losses

Rochester, Minn.-based Mayo Clinic said it will furlough or cut the hours of about 30,000 staff members to help offset about $3 billion in losses incurred by the COVID-19 pandemic, according to The Post Bulletin.

Mayo Clinic announced that it would need to take several cost cutting measures, including furloughs, earlier in April. However, the system didn't disclose the number of employees that would be affected. 

The temporary reduction in workforce is one of the ways the system is working to offset a $3 billion loss from the pandemic. Even with the cost-cutting measures, Mayo anticipates a $900 million shortfall this year.

The furloughs or reduced hours affect about 42 percent of Mayo Clinic's 70,000 employees across its campuses in Arizona, Florida and Minnesota. 

Affected employees will still receive healthcare benefits. 

The furloughs will begin in May and be spread throughout the rest of the year, Mayo Clinic spokesperson Ginger Plumbo told the publication. The duration of the furlough will vary depending on the hospital unit, she added. 

The furloughs will not affect physicians at the system, but physicians will receive a 10 percent wage reduction. In addition, senior managers will receive pay cuts of 15 percent and top executives will take a 20 percent reduction. 

The furloughs, cut hours and wage reductions are expected to save $1.4 billion. 

Mayo Clinic also has been taking other cost-cutting measures, including a hiring freeze and halting major construction projects. 

Mayo Clinic is also tapping into its reserves to bring $900 million in cash to the system. 

More articles on healthcare finance:
Hospital CEOs blast distributing stimulus funds based on Medicare revenue
LRGHealthcare's debt making it harder to find a partner, CEO says
39 hospitals get negative rating outlook from S&P amid pandemic

© Copyright ASC COMMUNICATIONS 2020. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.

 

Featured Webinars

Featured Whitepapers