Dive Brief:
- Trinity Health is laying off 557 information technology workers as it moves to outsource some tech work to a third-party vendor.
- The nonprofit hospital operator will lay off system administrators, service desk employees and engineers at various seniority levels, according to a notice provided to Michigan’s labor department last week.
- It’s the second wave of layoffs from Trinity this year as the company struggles with mounting costs and looming financial headwinds. Trinity cut 10.5% of its revenue cycle positions in January.
Dive Insight:
Trinity, which operates 91 hospitals and employs 133,000 workers across 23 states, will conduct the layoffs in October and November across its locations, the Catholic nonprofit told regulators. The cuts will not impact clinical roles.
When Trinity announced the restructuring in June, the company said it needed to outsource some IT roles to keep up with the increasing pace and complexity of healthcare technology.
“Sustaining that pace is increasingly difficult for any single organization on its own,” Trinity said at the time. “A partner whose core business is technology support gives us access to specialized expertise and innovation at the speed and scale health care now requires while strengthening service reliability.”
Trinity did not respond to an inquiry about what vendor it plans to use.
Increasing financial pressures were also a factor in the decision, it said. The health system, like many in the U.S., is juggling federal funding cuts, low reimbursement, staffing shortages and rising care costs for uninsured and underinsured patients.
"Like other not-for-profit health care systems, the financial pressures we are facing are real," Trinity said.
Similar financial pressures drove Trinity’s January layoffs for revenue cycle workers, the system said at the time. Trinity also outsourced those roles.
Despite the growing headwinds, the health system's operating income ticked up slightly in its most recent financial period, growing 1% to $200 million in the nine months ended March 31. Meanwhile, Trinity's net income rose to $1.1 billion, up from about $725 million the same time last year, thanks to strong investment earnings.
