LANSING, Mich. — The state's largest healthcare system announced Tuesday it will temporarily lay off about 2,475 employees and permanently eliminate about 450 positions due to the "dire financial effects" from coronavirus.
The CEO of Beaumont Health will take a 70% pay cut, while other executives will take a cut of up to 45%, a news release said.
"After Beaumont began caring for COVID-19 patients five weeks ago, nearly all inpatient and outpatient surgeries and other non-COVID-19 medical services had to be halted. In addition, the number of patients seeking care unrelated to COVID-19 dramatically declined after March 16," a news release said.
It's for those reasons Beaumont said it was forced to make the cuts.
Of the 2,475 temporary layoffs, most involve hospital administrative staff and others who are not directly caring for patients with or without COVID-19. Most of the 450 position eliminations are part of the corporate staff or are serving in other administrative roles, the hospital said.
“I am extremely proud of our team’s rapid response to COVID-19. While many front-line employees have never been busier, other parts of our operations have drastically declined or ceased. We must make difficult, quick decisions now to protect and readjust to an uncertain future,” CEO John Fox said.
In addition, Beaumont announced it will pause or cancel some nonessential projects.
According to a news released, in the first quarter, which ended March 31, Beaumont’s net income was -$278.4 million, a decrease of $407.5 million over the same period in 2019. Operating revenue fell to $1.07 billion, a $78.2 million decrease over the $1.15 billion reported in the first quarter of 2019.
Net operating income for the first three months of 2020 was -$54.1 million, a $91.7 million decrease compared to the same time last year, according to the hospital.
“Through this crisis, we have dramatically changed the way we care for patients. We have seen exponential growth in telehealth, new approaches to staffing and a regional perspective to deploy resources and assets,” Fox added. “We will continue to adapt our health care system to deliver the best, compassionate, extraordinary care every day. Despite an uncertain future, I am confident Beaumont will emerge from this crisis as a strong organization.”
Temporarily laid-off employees can apply for enhanced unemployment benefits available through state and federal programs. As additional medical services are brought back online, including Wayne, the hospital said employees could be asked to return to their roles. These individuals can also continue to participate in their Beaumont health insurance and other benefits at their current employee rates during the layoff period.
Those whose jobs are eliminated will receive a lump-sum severance package and will likely be able to take advantage of enhanced state and federal unemployment benefits. These employees will have the option to continue their benefits at current employee rates through their severance period, the hospital announced.
Impacted employees will be eligible to apply for other open positions at Beaumont and given priority.
“We will do everything we can to assist our employees affected by these changes. We never want to have to make decisions like this, but no one could have predicted the extraordinary impact this virus would have on health care and society overall,” Fox said.
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