Michigan Medicine to furlough 1,400 employees, delay building $920M hospital

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Citing a projected financial loss exacerbated by the COVID-19 pandemic, Ann Arbor-based Michigan Medicine plans to furlough or lay off 1,400 full-time employees, according to a May 5 news release.

The health system expects to record a financial loss of up to $230 million in the fiscal year ending June 30. The health system also expects losses to continue into the next fiscal year. 

In addition to the furloughs and layoffs, Michigan Medicine will implement a hiring freeze and top executives will take pay cuts ranging from 5 percent to 20 percent. 

The health system will also suspend merit pay, employer retirement matches and tuition reimbursement.

It will also delay nonurgent capital projects, including the construction of its new $920 million, 12-story inpatient facility. 

"While we are faced with continuing challenges as a result of this pandemic, we know that our collective effort will result in our successfully navigating this crisis and moving forward on a path of strength and sustainability," said Marschall Runge, MD, PhD, CEO of Michigan Medicine, dean of the medical school and executive vice president for medical affairs at the university. 

 

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