Dive Brief:
- Providence is laying off workers at facilities in Washington and Oregon as the nonprofit health system attempts to stay ahead of heightened economic and operational pressures.
- Providence Swedish, an eight-hospital system in Western Washington, will cut 3.8% of its workforce early next year, impacting approximately 296 roles across more than 100 departments. The system is cutting frontline and clinical roles as well as management and administrative functions.
- Providence Oregon will lay off more than 150 workers at Providence Medical Group and Providence Health Plan. The system said impacted employees will be notified this week and most reductions will focus on nonclinical roles.
Dive Insight:
Providence, the health systems’ parent company, has made multiple workforce adjustments this year, citing economic headwinds.
The Renton, Washington-based nonprofit health system restructured its executive team in January, froze nonclinical hiring in April and laid off approximately 600 workers in June.
Providence Swedish, which formed in 2012 as an affiliation between Providence and Swedish Health Services, announced further cuts to staff on Tuesday. The health system said the passage of the One Big Beautiful Bill Act, which will usher in state and federal Medicaid cuts, in part prompted the layoffs.
The health system is also contending with increased costs from state legislative policies and taxes, as well as heightened commercial insurer denials and declining procedural volumes.
“These are tough and complex – but necessary – decisions to address the significant economic pressures facing health care today,” said Dr. Elizabeth Wako, president and CEO of Swedish Health Services. “While layoffs are never our first choice, they are needed to sustain this organization.”
Jennifer Burrows, CEO of Providence Oregon, echoed those concerns when outlining why the health system would cut jobs.
“These reductions reflect our need to stay focused on financial stability and workforce challenges, intensified by recent policy changes and regulatory pressures,” Burrows said in a statement Tuesday. “While we are seeing progress, our efforts will continue until we balance revenue and expenses. These changes are part of ongoing restructuring across all health systems.”
Providence Swedish will also close a pharmacy and weight loss outpatient clinic in the coming weeks as part of its effort to cut costs. Providence Oregon has already shuttered some underperforming service lines, including a pediatric intensive care unit at St. Vincent Medical Center earlier this month.
The news of more layoffs has sparked some alarm among labor groups.
Jane Hopkins, registered nurse and president of SEIU Healthcare 1199NW, a union that represents some Providence Swedish workers impacted by the cuts, said Wednesday she was “troubled” by the health system’s decision.
“We cannot allow layoffs to become the default response [to H.R.1. the One Big Beautiful Bill Act],” Hopkins said in a statement. “When hospitals cut frontline care jobs at the same time federal cuts threaten Medicaid and other healthcare funding, it is patients and communities who pay the price. We will see longer wait times, sicker patients, and fewer staff available to meet rising care needs. We believe this is the wrong direction for healthcare.”
Meanwhile, Providence’s efficiency initiatives appear to be paying off. Providence posted third quarter results earlier this month that demonstrated a $229 million improvement year over year in operating income. Providence recorded $21 million for the three-month period ended Sept. 30.
However, the health system isn’t out of the woods financially. Providence is still running a $244 million operating deficit over the last nine months.
