Dive Brief:
- Jefferson Health and Lehigh Valley Health Network plan let 271 employees go over multiple rounds of layoffs in the next few months, following through on promises to increase operational efficiency after their merger last year.
- Jefferson will lay off 171 employees effective March 10, according to a Pennslyvania Worker Adjustment and Retraining Notification filed last month. Meanwhile, cuts at Lehigh will impact about 100 employees, according to a spokesperson.
- The layoffs come approximately five months after Jefferson Health and Lehigh Valley Health Network merged to create a 32-hospital system.
Dive Insight:
Lehigh Valley Health became a subsidiary of Jefferson in August, bringing its more than 20,000 employees into Jefferson’s 45,000-strong fold. Collectively, the health systems serve patients across Eastern Pennsylvania and Southern New Jersey.
The deal qualified as a mega-merger, creating a health system with $15 billion in expected annual revenue. At the time, executives said the merger was an opportunity to improve care by boosting efficiency and innovation.
Now, the health systems have announced workforce reductions. The layoffs are small, impacting less than 1% of the health system’s 65,000 employees. Still, the cuts come as providers face mounting pressure to streamline staff.
A recent survey from Deloitte found that executives are considering outsourcing or offshoring administrative functions in 2025, such as finance or information technology teams, in a bid to cut costs.
A spokesperson for Lehigh said the system is not outsourcing labor. However, Jefferson plans to transition a “limited number of non-patient facing administrative functions to an external partner to enhance efficiency,” according to a spokesperson.
Current academic literature is split on whether healthcare consolidation is associated with increased layoffs — some studies have found links between hospitals merging and job cuts, while other studies found no difference in rates of layoffs or were inconclusive.
A Lehigh spokesperson said the decision to cut staff was unrelated to the recent merger.
“This work began well in advance of our combining with Jefferson Health,” the spokesperson said.
Both health systems have previously cut staff or restructured.
In 2023, Jefferson collapsed five operating divisions into three — cutting an unspecified number of jobs in the process — in an effort to cut costs, according to reporting from the Philadelphia Inquirer.
Lehigh Valley also eliminated approximately 240 positions the same year during an organization-wide restructuring, according to a report from Lehigh Valley News. The health system cut additional staff in April 2024 when it shut down chiropractic services, according to a report from The Morning Call.
