One week after sharing additional details about its planned merger with Legacy Health, Oregon Health & Science University told staff it’s planning to lay off more than 500 workers. The news is drawing criticism from unions representing workers at the health care giant.
In an internal email obtained by OPB, OHSU president Dr. Danny Jacobs and senior leadership attributed the cuts to expenses outpacing costs, as Willamette Week first reported.
“Despite our efforts to increase our revenue, our financial position requires difficult choices about internal structures, workforce and programs to ensure that we achieve our state-mandated missions and thrive over the long-term,” Jacobs said in the Thursday email.
A 2019 file photo of Oregon Health & Science University's hospital. OHSU announced layoff plans in an email to staff Thursday.
Courtesy of Oregon Health & Science University
An OHSU spokesperson told OPB that the precise number of layoffs will be announced in the coming weeks.
On May 30, the health care giant announced that it’s moving forward with its planned merger with Legacy Health. In Thursday’s email, Jacobs said that, while this news likely raises questions about OHSU’s financial situation, the investment in Legacy is funded by borrowing with 30-year bonds that “cannot be used to close gaps in our fiscal year 2025 OHSU budget or to pay our members.”
OHSU plans to hold a town hall next week to answer staff questions.
In the email, leaders said they’ll provide significant updates as soon as possible as part of their “commitment to transparency.” They said discussions about workforce reductions will start “following the annual review and contract renewal process, with additional reductions happening over the next few months.”
Among those updates will be OHSU’s notifications under the Worker Adjustment and Retraining, or WARN, Act, which requires 60 days advance notice ahead of large-scale layoffs. OHSU also plans to notify staff if their contracts will not be renewed.
In May, Willamette Week reported that, while the system works to cut costs, Jacobs will be receiving an increase to his retirement benefits of $350,000 annually as part of a two-year contract extension. That will bring OHSU’s total yearly contribution to his retirement benefits to over half a million dollars.
In a statement, the Oregon Nurses Association said it’s “deeply concerned” by the layoff announcement.
“Recent reports highlighted that OHSU asked their departments to make cuts, including cuts to employee benefits, at the same time they gave their president a $350,000 boost to his retirement on top of his $1.65 million dollar salary,” the statement said. “OHSU needs to get its priorities straight and focus on expanding services to our communities, not cutting the jobs and benefits of people that actually make our healthcare system work.”
American Federation of State, County & Municipal Employees, a union which represents thousands of workers at OHSU, also criticized the move.
“It’s outrageous and immoral that OHSU is on one hand planning to lay off 500 hard-working people and reduce patient care, while writing checks for million dollar bonuses to their top executives and adding $350,000 to CEO Dr. Danny Jacobs’ retirement account,” said Jennie Olson, president of AFSCME Local 328, in a statement. “OHSU needs to prioritize patients and people instead of lining the pockets of people in ivory towers.”