Tower Health to lay off 293 employees

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Tower Health plans to lay off employees in West Grove, Pa., before the end of the year, according to a notice filed with state regulators Nov. 1.  

The 293 layoffs will occur by Dec. 31 and affect workers at Jennersville Hospital, Jennersville Family Medicine, West Grove of PA Associates and West Grove Clinic Co., all in West Grove. Tower Health filed the layoff notice after announcing in September that it will close Jennersville Hospital at the end of the year. 

West Reading, Pa.-based Tower Health said in September that it is trying to place affected employees and physicians into other positions within the health system. Affected workers will also be given priority consideration for open positions they are qualified for at Penn Medicine. Tower Health announced in July that it is developing a strategic partnership with Philadelphia-based Penn Medicine. 

"Tower Health announced the closure of Jennersville Hospital in September, effective December 31, 2021. WARN Act notices distributed yesterday allow us to meet the regulatory requirements related to the hospital's closure," Tower Health told Becker's Nov. 2. "We are continuing to work with impacted employees to place them into other positions within Tower Health or with other local healthcare systems."

After exploring a sale in 2020, Tower Health said in July that it plans to remain an independent system. The system may have a smaller footprint, as it signed a letter of intent to sell Chestnut Hill Hospital in Philadelphia and more than a dozen urgent care centers to Trinity Health Mid-Atlantic, part of Livonia, Mich.-based Trinity Health. 

Tower Health ended fiscal year 2021 with an operating loss of $445.7 million, compared to an operating loss of $436.9 million a year earlier. The figure for fiscal 2021 includes a $154 million write-off for the declining value of assets and a $206 million write-off for goodwill, according to the Philadelphia Business Journal

Tower Health has a "B+" rating with Fitch Ratings, and the credit rating agency upgraded the system's outlook to stable in October. 

"The rating outlook revision to stable reflects … Tower Health's material improvement, albeit still negative, on operating income levels, combined with meaningful steps by senior management to divest of underperforming assets and place Tower on a more strategically viable path going forward," Fitch said. 

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