Oregon Health & Science University told officials it plans to lay off more than 500 employees, a week after announcing more details about its planned merger with Legacy Health, drawing criticism from the union that represents university workers. Healthcare giant.
In internal emails obtained by OPB, OHSU President Danny Jacobs and senior administrators said the cuts were made because expenses exceeded costs, as first reported by Willamette Week.
“Despite our efforts to increase revenue, our financial situation requires us to make difficult choices about our internal structure, workforce and programs in order to achieve our state-mandated mission and thrive in the long term,” Jacobs said in an email Thursday.
A 2019 file photo at Oregon Health & Science University Hospital. OHSU announced the layoff plans in an email to staff on Thursday.
Courtesy of Oregon Health & Science University
An OHSU spokesperson told OPB that the exact number of layoffs will be announced in the coming weeks.
The healthcare giant announced it would move forward with plans to merge with Legacy Health on May 30. Jacobs said in an email Thursday that while the news could raise questions about OHSU’s financial position, the Legacy investment is funded by 30-year bond borrowings and “cannot be used to cover any shortfalls in OHSU’s fiscal year 2025 budget or to make payments to members.”
OHSU plans to hold a town hall meeting next week to answer employees’ questions.
In the email, leaders said they would provide significant updates as soon as possible as part of their “commitment to transparency,” and that discussions about job cuts would “begin following the annual review and contract renewal process, with additional reductions to come in the coming months.”
Those renewals include OHSU’s notice under the Worker Adjustment and Retraining Act (WARN Act), which requires 60 days’ notice before any large-scale layoffs. OHSU also plans to notify staff if it will not renew its contract.
In May, Willamette Week reported that while the system is working to cut costs, Jacobs will have his retirement benefits increased by $350,000 a year as part of a two-year contract extension, bringing OHSU’s total annual payments toward his retirement benefits to more than $500,000.
The Oregon Nurses Association said in a statement that it was “deeply concerned” by the layoff announcement.
“Recent reports have highlighted how OHSU has asked departments to make cuts and reduced employee benefits while increasing the chancellor’s annual salary of $1.65 million plus an additional $350,000 in retirement benefits,” the statement said. “OHSU needs to get its priorities straight and focus on expanding services to the community, rather than cutting jobs and benefits for the people who really make the health care system work.”
The American Federation of State, County and Municipal Employees, the union that represents thousands of OHSU workers, also criticized the move.
“It is outrageous and immoral that OHSU, on the one hand, plans to lay off 500 hard-working employees and cut patient care while at the same time writing multimillion-dollar bonus checks to its top executives and adding $350,000 to CEO Dr. Danny Jacobs’ retirement account,” said in a statement Jenny Olson, president of AFSCME Local 328. “OHSU needs to prioritize patients and people, not line the pockets of those in the ivory tower.”
