Michigan Health Care Group Laying Off Nearly 3,000 Employees

Michigan Health Care Group Laying Off Nearly 3,000 Employees
Medical personnel takes samples of a patient at a drive-through CCP virus testing lab at Royal Oak Beaumont Hospital in Royal Oak, Michigan on March 30, 2020. (Jeff Kowalsky/AFP via Getty Images)
Zachary Stieber

A large health care group in Michigan is laying off nearly 3,000 employees in the latest repercussions to halting elective surgeries and other procedures that hospitals rely on for income.

Beaumont Health said it is laying off about 2,475 employees in a move it's describing as temporary and permanently eliminating 450 other positions. The company has 38,000 employees.

Most of the temporary layoffs involve hospital administrative staff and others who don't directly care for patients. Most of the eliminated positions are part of corporate staff or the administration.

The move comes after the system halted "nearly all" surgeries and other non-COVID-19 medical services five weeks ago.

COVID-19 is a disease caused by the CCP (Chinese Communist Party) virus, a novel coronavirus that emerged from mainland China last year.

Dire projections for COVID-19 hospitalizations prompted governors across the nation, including Michigan Gov. Gretchen Whitmer, to order elective surgeries canceled so hospitals would have enough room to handle the expected surge in patients. But projected needed hospital beds and intensive care beds have dropped in later projections.

A view of the east entrance to Beaumont Hospital in Royal Oak, Michigan on April 8, 2020. (Elaine Cromie/Getty Images)
A view of the east entrance to Beaumont Hospital in Royal Oak, Michigan on April 8, 2020. (Elaine Cromie/Getty Images)

Michigan doesn't release data about hospitalizations but the number of new cases dropped from a peak of 1,031 on April 15 to 404 on April 19, the last day figures are available for.

Besides slashing jobs, Beaumont announced its CEO, John Fox, would take a 70 percent pay cut to his base salary while other members of the company's executive leadership team will take temporary pay cuts of up to 45 percent of their total compensation. Those moves were also framed as temporary.

“I am extremely proud of our team’s rapid response to COVID-19. While many front-line employees have never been busier, other parts of our operations have drastically declined or ceased. We must make difficult, quick decisions now to protect and readjust to an uncertain future,” Fox said in a statement.

“We also expect economic pressures on Beaumont and the health care industry to continue well after the COVID-19 initial surge subsides, which is why we made the difficult decision to eliminate 450 positions. We must adjust the way we operate our organization moving forward. This pandemic has changed the delivery of health care, and we will be treating patients with this virus until we get a vaccine.”

Beaumont said it has cared for nearly 30,000 COVID-19 patients, the most of any system in the state. The system's net income fell from $129.10 million to minus $278.4 million in the first quarter of this year.

Some other states are easing strict lockdown measures. The orders were initially implemented in a bid to slow the spread of the CCP virus and thus not have patients overwhelm hospital systems, but with systems struggling financially, laying off workers, and, in most cases, not seeing a surge in patients past capacity, governors are loosening rules, including allowing or considering allowing elective surgeries once again.