Tenet to cut 700 more jobs, says $1B divestiture plan is on track

Dallas-based Tenet Healthcare is under pressure from activist shareholders and is moving quickly to revamp its business.

After reporting a net loss in the third quarter of 2017, Tenet launched a $150 million enterprisewide cost reduction initiative, which involved renegotiation of contracts with suppliers and vendors, as well as the elimination of about 1,300 jobs.

In December, the company expanded the cost-cost cutting plan to $250 million, but did not disclose whether additional jobs would be cut. In a presentation to investors at the J.P. Morgan Healthcare Conference in San Francisco on Monday, Ron Rittenmeyer, executive chairman and CEO of Tenet, said 2,000 jobs, or about 2 percent of Tenet's workforce, would be eliminated under the cost-cutting plan.

Mr. Rittenmeyer also discussed other actions Tenet is taking to improve its finances, including the divestiture of hospitals in non-core markets. He said the program, which is expected to yield more than $1 billion of proceeds, is on track, and divestitures will be completed throughout 2018. The plan includes the sale of Tenet's minority interest in a joint venture with Dallas-based Baylor Scott & White Health.

Tenet is also exploring the sale of Conifer Health Solutions, its healthcare business services subsidiary. The company said in December it expects to decide whether to sell Conifer during the first half of 2018.

"Tenet is operating with urgency, accountability for performance and a relentless focus on quality care, patient satisfaction, cost management and compliance," Mr. Rittenmeyer said in a statement. "We are focused on flattening and simplifying our enterprise, growing our hospital and ambulatory positions in attractive markets and reducing costs to improve our financial performance and enhance returns for our shareholders."

The for-profit hospital operator ended the third quarter of 2017 with a net loss of $367 million on revenues of $4.59 billion. That's compared to the same period of 2016, when the company recorded a net loss of $8 million on revenues of $4.85 billion.

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