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Hospital mass layoffs on the rise

The Advisory Board, October 3, 2011

The sluggish economy and looming provider payment cuts have driven more hospitals to consider reducing staff as a way to stabilize their bottom lines. According to recent Bureau of Labor Statistics data, there were 13 hospital mass layoffs—defined as involving 50 or more employees—in August, resulting in 1,085 initial unemployment benefit claims. If the layoff pace continues, BLS analysts say hospitals in 2011 will post 127 mass layoffs involving 8,257 people, which would give 2011 the third-highest number of mass layoff incidents in the last decade. This week, several major hospitals and health systems announced mass layoffs, highlighting the continuing trend. For example, Virginia-based Inova Health System on Thursday announced plans to cut 606 employees as it moves to outsource environmental services, laundry, and referral management and scheduling.