OHSU prepares to lay off at least 500 employees
PORTLAND, Ore. (KGW/KTVZ) — Oregon Health and Science University is preparing to lay off at least 500 employees, the hospital announced Thursday in a message to staff, KGW reported.
The letter says the hospital's revenue has not kept pace with rising supply and labor costs, and that managers will begin discussing workforce reductions after an upcoming annual review and contract renewal process.
The letter doesn't say how many layoffs are expected, but states that the review process will include notifications under the federal Worker Adjustment and Retraining Notification (WARN) Act, which requires employers to provide at least 60 days notice before any layoffs that will impact 500 or more employees at a single location. As of Friday, OHSU is not yet listed in Oregon's WARN notice list.
The news comes as the hospital is pursuing a merger that will see OHSU absorb the Legacy Health system, renaming the combined company OHSU Health. The two companies announced plans for the merger last year, and signed a binding agreement last week. The combined company will be the largest employer in the Portland area with about 30,000 employees.
A summary of the merger terms posted to OHSU's website states that all current OHSU and Legacy employees will become employees of the combined system, and it says OHSU will commit to making no workforce reductions for at least the first six months after the deal closes, although the document doesn't rule out the possibility of later layoffs.
The deal is still going through the regulatory process and isn't expected to close for several months. The current layoffs at OHSU will apparently happen before that point, with the letter describing the layoffs as happening in the next 90 days. The hospital first warned staff in May of cost cuts and possible layoffs, according to Willamette Week.
Still, the current round of layoffs is likely to place greater scrutiny on OHSU's financial position heading into the merger. In an Q&A on its website, OHSU noted that it is "facing financial challenges" and acknowledged that there have been questions about how it could afford the Legacy acquisition. Addressing the concern in the Q&A, OHSU said it has "built up its capital capacity over the past 15 years in order to be able to borrow the funds" for the deal.
The layoff announcement letter also tackled the question, stating that the planned 30-year bonds that will finance the Legacy merger "cannot be used to close gaps in our fiscal year 2025 OHSU budget or to pay our members."
The letter is signed by OHSU President Danny Jacobs and eight other members of the executive leadership team.
