Ochsner Health cutting 770 jobs to reverse 2022's 9-figures losses

Ochsner Health is “taking the difficult step” of cutting 770 positions, or about 2% of its total team, in order to reduce costs across the 48-hospital system, CEO Pete November wrote in a message to employees published online Thursday morning.  

The job eliminations are spread across management and “primarily non-direct patient care roles,” the CEO said. No physicians will be impacted, and any employees with active clinical credentials whose roles are being cut will be given the chance to step into a direct patient care role with the system, he said.

“I take very seriously the gravity of this decision and its impact on our team members and their families,” November wrote in the notice. “We will do everything we can to deliver the resources and support our team needs and treat everyone leaving our organization with the respect and dignity they deserve.”

The CEO said that employees whose jobs are being impacted will be informed and briefed in Thursday meetings. Both full- and part-time workers will receive full pay and benefits for up to 65 days alongside severance packages and other career and wellness support, he said.  

The layoffs are the largest in the New Orleans-based system's history and are expected to save between $125 million and $150 million per year, the organization told nola.com. November, who took up the CEO role Nov. 1 after serving as chief financial officer, told the outlet that no other cuts are anticipated for this round of layoffs.

Prior to the cuts, Ochsner Health said it had more than 38,000 employees as well as more than 4,700 employed and affiliated physicians. In 2022, it treated more than 1.4 million people across its 48 hospitals and over 370 health and urgent care centers in Louisiana, Mississippi and Alabama.

The nonprofit system reported a $96.4 million operating loss and a $185 million net loss across 2022, a turnaround from the $138.6 million operating gain and $306.5 million net gain of the prior year. A $390.9 million year-over-year increase in salary and wage expenses contributed to the reversal. 

November’s message to staff said that the system has worked to stem the bleeding by reducing discretionary spending, decreasing reliance on agency workers and pausing hiring for management positions. The system also renegotiated supply and service contracts and launched efforts to increase clinical visits.

Still, he wrote, the system needed “to do more” to maintain its finances and continue being able to serve patients.

“We are not alone in this: healthcare providers across the country have experienced increased labor costs, a shortage of patient care clinicians, high inflation and the end of pandemic relief funding from the government,” the CEO wrote.

Ochsner’s 770 job eliminations are a higher tally than the layoffs announced to date across dozens of hospitals and health systems in 2023.

Among the more impactful of those have come from Crozer Health (215 people, 4% of total workforce), Marshfield Clinic Health System (346 employees, less than 3% of total workforce), Memorial Sloan Kettering Cancer Center (337 employees, less than 2% of total workforce) and Virginia Mason Franciscan Health (between 300 and 400 people, less than 2% of total workforce).