Recent layoffs raise questions about the industry’s job outlook

More people are working in healthcare than a year ago, but recent layoffs across health systems raise questions about what lies ahead for the industry.

Employment in the healthcare sector increased 3.8% year-over-year in the first quarter, according to preliminary data released Friday by the Labor Department’s Bureau of Labor Statistics. In ambulatory care, employment increased by 3.8%, and the number of people working in home health increased by 4.8%. According to the data, there has been an increase of 3.3% in employment in hospitals, which may be revised in the coming months.

However, healthcare hiring appears to be slowing. As per the report, the industry added an estimated 33,900 jobs in March as compared to 54,900 jobs in February.

Health systems and other providers are improving in the post-pandemic environment by developing new care delivery models while grappling with high labor costs and supply chain issues. As a result, employers are scrambling to hire for the high demand. Frontline positions such as nursing, but other staff are being cut in an effort to cut costs.

Earlier this week, Tacoma, Washington-based Virginia Mason Franciscan Health confirmed plans to lay off about 400 administrative workers, or less than 2% of its workforce, citing “tremendous financial strain.” Kelly Campbell, vice president of marketing and communications at Virginia Mason, said the affected employees were mostly in non-patient-facing roles and the system continues to invest in its frontline workers.

Chicago-based CommonSpirit Health, with which Virginia Mason is affiliated, also indicated pending layoffs.

“Like many healthcare providers, we are experiencing severe financial stress due to a number of factors,” a CommonSpirit spokesperson said Friday. “We are taking steps to improve efficiency and effectiveness which may include changes that affect roles in our divisions and national office, as well as reducing our costs where appropriate.”

The spokesperson said the change will not affect patient care.

Last month, Crozer Health in Upland, Pennsylvania said It was laying off more than 200 employees, or 4% of its workforce, as part of an organizational restructuring aimed at eliminating administrative overlap and reducing underutilized services. The system is estimated to be losing $7 million a month.

Roseville, California-based Adventist Health announced in February that It plans to consolidate seven Care networks into five And cut dozens of positions ranging from administrative directors to project managers.

Executive leadership roles are also in the firing. Novant Health in Winston-Salem, North Carolina last week cut three top roles from its executive team: Jesse Cureton, chief consumer officer; Angela Yochem, Chief Transformation and Digital Officer; and Paula Dean Kranz, Vice President of Innovation Enablement.

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