San Diego-based Sharp HealthCare shared this week an “organizational realignment” that will bring workforce reductions, its second such layoff wave in just over a year.
The system, in a provided press release, said that about 260 employees would be impacted by the changes. Though “many were immediately provided with offers of alternative employment,” Sharp said the reorganization will reduce its roughly 22,000-person headcount by just under 1%.
The organization’s president and CEO, Chris Howard, said in a statement that the system would be “providing resources, career assistance and opportunities to apply for available roles where appropriate." A representative did not immediately respond to Fierce Healthcare’s follow-up questions regarding other potential separation benefits, such as severance.
The prior cuts, shared in June 2025, had eliminated 315 employees’ roles and were accompanied by hours reductions. Sharp has cited rising financial pressures for both rounds of layoffs and reorganization.
This time around, the system specifically called out rising costs for labor, supplies and “other unavoidable expenses” that have outpaced revenue due as well as “stagnant” pay rates from government programs.
It also pointed to policy changes such as the federal government’s One Big Beautiful Bill Act, which will impact Medicaid enrollment, and policies that will begin whittling hospitals’ supplemental Medicaid payments in earnest starting in 2027. And at the state level, California passed a law last year that outlines staffing ratios for stand-alone acute psychiatric hospitals.
“It is clear that Sharp—like other health systems nationwide—is facing the impact of these challenges,” Howard said in a statement. “In response, we’ve had to continue to assess how we work, how we’re structured, and what it will take to ensure we uphold our mission to improve the health of those we serve with a commitment to excellence in all that we do.”
The health system said its reorganization will help position its operations and its communities for sustainable care delivery, and specifically called out changes to its “behavioral health care, select outpatient services, and certain Sharp systemwide and regional operations.” For behavioral care that includes staffing adjustments to meet the state’s requirements—changes that Howard told the San Diego Union-Tribune encompass 120 of the affected roles, and for which it had received a temporary enforcement reprieve.
Sharp Healthcare is San Diego County’s largest private employer. The nonprofit includes five acute care hospitals, five specialty hospitals, three affiliated medical groups and a health plan
Across its 2025 fiscal year, which ended on Sept. 30, 2025, the organization reported nearly $5.5 billion in total operating revenue and a $379.2 million bottom line, though its operations lost $173.5 million (-3.1% operating margin). Across the first three quarters of its current fiscal year, it reported an $11.2 million operating loss (-0.3% operating margin) and $487.2 million net gain.