Healthcare layoffs: 21 figures that tell the unfolding story

What has seven letters, made dozens of Becker's headlines in a matter of months, and looms over everyone in healthcare — from the front desk to the top office? Layoffs

We've rounded up some of the year's biggest job-cut stories, including 21 figures, to help explain the depth and breadth of healthcare's layoff problem: how it started, where it stands and where it's going. 

  • Healthcare/products companies and manufacturers — including hospitals — announced 2,668 job cuts in July, second only to the tech industry.

  • That brings healthcare's grand layoff total to 40,947 in the first seven months of the year; a 101 percent increase from the same time period in 2022.

  • Why? Salaries and wages tend to be a health systems' highest expense, and have grown at a median rate of 7.3 percent in the first quarter of 2023. Prices are rising at a particularly grim time for hospital finances — operating cash flows might never reach pre-pandemic margins, according to Moody's. 

  • As such, labor costs are crippling, 47 hospital executives told Becker's. Health systems are working to bring costly contract labor down, which especially crimped budgets during COVID-19. Altru Health, based in Grand Forks, N.D., has brought contact costs down 57.6 percent in the past year. And Norton Healthcare out of Louisville, Ky., has lowered them 74 percent.  

  • But cutting contract costs is not a workforce fix-all. Clinicians and employees are increasingly pushing for higher pay; Becker's has reported on 12 hospitals and health systems raising workers' wages since June 21, many the result of strikes and/or union negotiations.

  • The reality is, labor isn't cheap. And if hospitals and health systems can't find a way around it, they have to find a way through it. The University of Nebraska Medical Center in Omaha is planning not only to reduce costs per labor unit, but to reduce labor units themselves, Chancellor Jeffrey Gold, MD, told Becker's. A health system redesign is looming — Chip and Joanna Gaines style — as organizations look to slim processes, including headcount.

  • Streamlining means different things to different organizations. For 17 health systems, leadership bore the restructuring brunt. Seattle Children's cut 135 leadership positions in June; Memorial Health in Springfield, Ill., has laid off 20 percent of its leaders.

  • One C-suite role in particular has felt the burn: chief operating officers. Five systems have slashed the job this year, reallocating responsibilities to other executives.

  • Yet, non-executive workers remain most vulnerable when it comes to job cuts. Becker's has reported on 78 hospitals and health systems that laid off workers this year, often from administrative departments. Notably, New Orleans-based Ochsner Health conducted its largest layoff to date in May, cutting 770 positions. And Philadelphia-based Jefferson Health reduced its workforce by about 400 jobs in July.

  • Despite the nursing shortage, clinicians aren't safe, either. This spring, McLaren St. Luke's Hospital in Maumee, Ohio, laid off 743 workers, including 239 RNs — and they weren't the first (or only) hospital to do so. 

  • Hospitals and health systems aren't the only ones feeling the pinch. Five digital health companies recently laid off workers — including Amazon, which cut jobs across its online pharmacy, digital health and fitness tracker and virtual primary care units.

  • So have CVS Health — which cut 5,000 non-patient-facing jobs earlier this month — and Walgreens Boots Alliance, which laid off 504 corporate employees in May.

  • Despite layoffs at a large sum of healthcare organizations, affected workers can take some comfort: The industry still needs them. Healthcare gained 63,000 jobs in July, and its workers have higher confidence in their ability to find and keep a job than employees of any other industry. 

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