Ethan Rhodes
The COVID-19 pandemic has forced hundreds of hospitals to furlough, lay off, or reduce the pay of their workers. While layoffs are slowing down as margins improve, some hospitals are still cutting staff due to financial issues. In 2023, digital health startups such as Nomad Health were also forced to lay off staff as hospitals faced budget pressures. In 2024, five hospitals laid off over 100 employees, and in 2025, UC San Francisco workers went on a one-day strike to protest recent staff cuts.
| Characteristics | Values |
|---|---|
| Reason for layoffs | Financial issues, financial strain caused by the COVID-19 pandemic, budget pressures |
| Hospitals laying off employees | North Memorial Health, San Gabriel (Calif.) Valley Medical Center, Bristol Health, North Shore Medical Center, Nacogdoches Memorial Hospital, Children's Minnesota, Baylor Scott & White Health, Eastern Niagara Hospital, Detroit Medical Center, Mercy Iowa City, NorthBay Healthcare, Brattleboro Retreat, Kaiser Permanente, M Health Fairview, UCSF, Olive AI, Commure, Nomad Health, Wheel |
| Number of employees laid off | 100, 62, 60, 150, under 50, 150, 102, 80, undisclosed, 29, 31, 85, 45, undisclosed, 230, 130, 120, 25%, 17%, 56, 28% |
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What You'll Learn
Layoffs due to financial issues
Numerous hospitals and healthcare systems have had to lay off employees due to financial issues. Below are some examples:
Renton, Washington-based Valley Medical Center
Citing financial challenges, state and federal government uncertainties, and private sector reimbursement issues, Valley Medical Center laid off 101 employees in late March after federal Medicaid benefits were unexpectedly halted on December 31. The hospital also announced plans for service consolidations and other changes to 50% of its workforce over the next two months. Several units, including the Northwest Pavilion inpatient adult and pediatric units, will be closed by the end of June.
New York City-based NewYork-Presbyterian
NewYork-Presbyterian, facing macroeconomic challenges, planned to lay off 2% of its employees, amounting to 1,000 people.
Portland-based Oregon Health & Science University (OHSU)
OHSU, comprising 12 hospitals and more than 32,000 employees, announced plans to lay off at least 500 employees due to financial issues. The health system cited increasing expenses, including supplies and labor costs, as outpacing revenue growth.
Cleveland-based University Hospitals
University Hospitals is reducing its leadership structure by over 10% as part of more than 300 layoffs, attributing these decisions to financial challenges.
Dallas-based White Rock Medical Center
White Rock Medical Center laid off nearly 35% of its staff, amounting to 158 employees. Former employees raised concerns about staffing, financial, and supply issues, recommending that patients avoid the hospital. The layoffs resulted in a temporary halt in accepting EMS-transported patients.
The above examples demonstrate how financial pressures, rising costs, and operational challenges have led to difficult decisions and layoffs in the healthcare industry.
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COVID-19 pandemic impact
The COVID-19 pandemic has had a profound impact on hospitals and healthcare systems worldwide, leading to significant financial challenges and operational difficulties. Hospitals have had to grapple with increased expenses and a decline in revenue, resulting in cost-cutting measures, including layoffs and furloughs of healthcare workers.
Financial Challenges and Rising Costs
The pandemic has caused a significant financial strain on hospitals due to increased expenses and a decrease in revenue from elective procedures and non-COVID-19 patients. Hospitals have reported steep losses, with revenue drops of up to 50%-70% in some cases. The high cost of personal protective equipment (PPE) has also contributed to financial challenges. For example, Trinity Health's monthly spending on PPE increased from $750,000 to $2 million. The Michigan Health and Hospital Association estimated that hospitals in Michigan were losing more than $300 million per week during the pandemic.
Decline in Elective Procedures and Non-COVID-19 Patients
Hospitals have experienced a decrease in revenue due to the cancellation or postponement of elective procedures, which are typically more lucrative. As Kevin Lingell, a spokesperson for the Service Employees International Union, noted, hospitals will struggle to avoid layoffs without these elective procedures. The focus on treating COVID-19 patients and the public's reluctance to seek non-emergency medical services during the pandemic further contributed to the decline in revenue from non-COVID-19 patients.
Layoffs and Furloughs of Healthcare Workers
To cut costs and mitigate financial losses, hospitals have been forced to lay off or furlough staff. This has included both administrative and clinical positions. For example, Beaumont Health in Michigan laid off 2,475 workers, and Kaiser Permanente in Northern California laid off about 200 employees. Hospitals have also offered buyouts or early retirement packages to reduce their workforce, such as Humana, which offered buyouts to some of its workers. These layoffs and furloughs have had a significant impact on healthcare workers, causing financial hardship and increasing workloads for those who remain employed.
Impact on Patient Care and Services
The reduction in staff has had a direct impact on patient care and the range of services hospitals can provide. Nurses in ERs and ICUs, for example, have had to take on additional tasks, such as cleaning and maintaining rooms, due to the layoff of support staff. Hospitals have also closed certain departments and units, such as Paradise Valley Hospital's decision to close its obstetrics, labor, and delivery, and newborn nursing units due to low birth rates. These closures further reduce the availability of healthcare services for non-COVID-19 patients.
Efforts to Mitigate Financial Losses
In addition to layoffs and furloughs, hospitals have implemented various strategies to mitigate financial losses. Some hospitals have raised prices for procedures to offset lost revenue, despite criticism of already high rates. Hospitals have also reviewed contract expenses and workflows to increase efficiency and reduce spending. For example, the New Mexico academic system has initiated financial improvement initiatives to balance its budgets.
The COVID-19 pandemic has had far-reaching consequences for hospitals, disrupting their financial stability and forcing difficult decisions that impact both healthcare workers and patients. These challenges have highlighted the vulnerabilities within the healthcare system and the need for sustainable solutions to ensure the continued provision of quality healthcare during crises.
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Staffing challenges
Hospitals and health systems have laid off or furloughed employees due to financial constraints, with hundreds of institutions impacted nationwide. These financial challenges have been exacerbated by the COVID-19 pandemic, which has placed unprecedented demands on the healthcare system. For instance, Minneapolis-based Children's Minnesota laid off 150 employees, attributing their financial difficulties to the pandemic's impact. Similarly, Dallas-based Baylor Scott & White Health laid off 102 finance and accounting employees, demonstrating the breadth of roles affected.
The financial strain has led to layoffs across various hospital departments, including clinical, administrative, and management positions. Detroit Medical Center, for instance, confirmed layoffs impacting a range of roles, while Mercy Iowa City laid off 29 employees to address financial strain tied to the pandemic. NorthBay Healthcare, a non-profit health system, also laid off 31 employees as part of its pandemic recovery plan.
In addition to hospitals, healthcare startups have also faced staffing challenges and have been forced to lay off employees to remain operational. Digital health startups, such as Nomad Health, have experienced demand drops in the healthcare staffing market due to hospitals' budget constraints. Other startups like AppliedVR and Wheel have laid off a significant percentage of their workforce to focus on core initiatives and transition strategies.
The impact of these staffing challenges extends beyond job losses, as remaining employees may experience decreased job satisfaction and increased concerns about patient care and their own retirement benefits. Strikes have also occurred, with UC San Francisco workers protesting recent staff cuts and the prioritization of executive hiring over staff retention. The layoffs have created a larger talent pool for ASCs and private practices, which offer competitive advantages in salary and work-life balance.
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Patient care concerns
The American healthcare system is facing a critical crisis in patient care due to an unprecedented wave of hospital layoffs in 2025. 51 hospitals and health systems have announced layoffs, with UCSF alone laying off almost 200 workers. These workforce reductions may provide short-term financial relief for hospitals but risk creating long-term problems that negatively impact patient care.
One of the main concerns regarding patient care is the potential degradation of care quality. With fewer staff members, the workload for remaining employees increases, which could lead to overworked staff and potential burnout. This may result in a decline in the quality of patient care, as there are fewer resources available to meet patient needs. This is especially true for smaller hospitals, which may face existential threats due to staff cuts.
Another issue is the loss of experienced staff with specialized knowledge. Layoffs may result in the departure of employees with decades of experience, as seen in the case of respiratory therapy supervisors at UCSF who were laid off after 17 and 28 years of service. The loss of such personnel could negatively impact patient care, as they play a critical role in the patient experience and have valuable expertise that cannot be easily replaced.
Additionally, hospitals serving predominantly Medicaid populations are at risk of closure due to funding cuts. This creates concerning access issues for low-income patients who rely on these facilities for care. The closure of these hospitals could result in reduced healthcare options and longer travel distances for patients seeking treatment, potentially affecting their ability to receive timely and adequate care.
Furthermore, the impact of technological disruptions on patient care cannot be overlooked. As seen in the CrowdStrike outage, over 750 US hospitals experienced network disruptions, with more than 200 hospitals facing outages directly related to patient care. These outages affected various services, including health records, fetal monitoring systems, and tools for remote monitoring. Such disruptions highlight the vulnerability of hospitals to technological failures and the potential consequences for patient well-being.
To address these patient care concerns, hospitals must carefully navigate the challenges posed by financial constraints while upholding their fundamental mission of serving patient needs. This includes balancing financial sustainability with care quality, investing in technology to reduce administrative burdens, developing strategic partnerships, and focusing on high-value services that meet community requirements. By thoughtfully planning and adapting to these challenges, healthcare systems can emerge stronger and better equipped to serve their patients.
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Employee reactions and strikes
Employee reactions to hospital layoffs have ranged from strikes and protests to concerns about patient care and job security. In July 2025, service and technical workers at UC San Diego Health launched a one-day strike over alleged unlawful layoffs and stalled contract negotiations, affecting more than 100 union members. The eliminated positions included hospital nursing assistants, senior nurse's aides, and hospital lab technicians. In addition to the technical group, service workers in roles from dining services to mail rooms also joined the strike in solidarity.
In another instance, workers at a major Bay Area healthcare network characterized mass firings as "heartless," expressing concerns about the impact on patient care and the hospital network's existing challenges. UCSF employees, including longtime workers, also criticized the handling of the layoffs, with some organizing multiple strikes to protest the staffing crisis.
Financial pressures and industry-wide shortages of clinical labor have contributed to escalating expenses, leading many hospitals to lay off administrative and managerial staff or even frontline workers. While some hospitals have cited financial challenges, including those caused by the COVID-19 pandemic, employees have questioned these claims, suggesting that other areas of spending appear unaffected.
The layoffs have also raised concerns about job security and the well-being of the remaining staff. With hospitals aiming to reorganize their expenses and scale down services, employees worry about the potential impact on their workload and patient care. As hospitals navigate financial constraints and operational challenges, employees are faced with the uncertainty of potential job losses and the strain of reduced staff on their daily work.
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