An anticipated second wave of nonclinical layoffs has kicked off this week at nonprofit health system Mass General Brigham, a spokesperson for the organization confirmed Monday.
The cuts at Massachusetts’ largest private employer began roughly a month ago, with the system citing a $250 million two-year budget gap it is working to close. An annual financial report released shortly after said the “strategic reorganization of management and administrative positions” is expected to save more than $200 million per year.
MGB has so far declined to share the total number of workers being impacted by the layoffs, and the lack of state Worker Adjustment and Retraining Notification (WARN) notices to date suggests the cuts are distributed widely enough across the system’s locations to avoid the regulatory requirement.
The Boston Globe, citing unnamed sources, reports that roughly 1,500 positions out of the system’s 82,000 will be affected. There have also been reports that some of those who have been laid off are critical to front-line care functions despite not being clinicians themselves.
In an email to Fierce Healthcare, a representative confirmed that notices would be going out to affected employees this week. The impacted employees will also be receiving “market competitive severance packages and benefits coverage,” Jennifer Street, senior vice president in charge of MGB’s communications, said in an attributed statement.
Street’s statement also noted that the management and administrative position consolidations aim to “enhance efficiency, reduce costs, and maximize support for frontline clinicians. This decision is necessary despite years of diligently promoting a culture of responsible resource stewardship and developing initiatives that generate diversified sources of revenue.”
Other materials provided by MGB in response to an inquiry about the layoffs cited expense inflation that outpaces payer reimbursement, capacity and length of stay challenges, and operational inefficiencies including “duplicative processes and too many administrative layers.”
MGB is coming off a $72 million operating loss (-0.4% operating margin excluding some prior year revenue) for the 2024 fiscal year ended Sept. 30, though hundreds of millions in nonoperating gains pushed its bottom line to a $282 million gain. It most recently reported a $53.8 million operating loss (-1% operating margin)—including a 9% year-over-year rise in wage expenses—for the first quarter of its current fiscal year.
MGB’s layoffs land amid a broader restructuring of the clinical and academic teams of the system’s flagship Massachusetts General Hospital and Brigham and Women’s Hospital as singular departments, which was announced a year ago as a multiyear process.
It also comes alongside uncertainty regarding federal funds and grants, in particular the research grants that MGB’s research arm relies on. Though the organization brought in $1.27 billion in research revenue from the National Institutes of Health and other federal agencies during its 2024 fiscal year, executives have previously said their decision to lay off staff does not reflect announcements from the new administration of blanket grant cuts.