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Essentia Health announces 900 more layoffs

Updated: May 21, 2020 10:14 PM

Because of the slowdown in patient volumes, Essentia Health announced 900 more layoffs on Thursday.

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The health care provider said that operational losses due to the pandemic have totaled nearly $100 million dollars, with more on the horizon.

“Despite our best efforts, the many cost-reduction measures we’ve taken over the last several weeks are not sufficient to preserve our mission and the health of the organization,” says Essentia Health CEO David C. Herman, MD. “This has prompted our leadership team to carefully consider the most difficult decision we’ve faced since I joined Essentia five years ago and move forward with permanent layoffs.”

About 900 people, about 6% of the workforce, will be affected by the layoffs. Essentia will continue to provide health insurance for noncontract employees for the next three months. Staff covered by collective bargaining agreements have other protections, including the right of recall.

Essentia Health's East Market president Dr. Jon Pryor said they looked at all areas when making the cuts. 80% of laid off employees were in non-direct care and 20% were in direct patient care.

Dr. Pryor said, "Really, you can't do that surgery without the facilities people keeping the O.R.'s working and the environmental services people keeping it clean and the nutrition people who give you sustenance and your patient sustenance and so on and so forth, so everyone in the Essentia family has a role in healthcare, and that's what I think makes it so difficult."

Additionally, there are about 850 Essentia colleagues on administrative leave with benefits through July 31, with the intention of being called back to work as needed. 

“I recognize and deeply appreciate all our colleagues’ contributions,” Dr. Herman says. “While the COVID-19 crisis has resulted in significant shifts in society and how we care for our communities, our commitment to safe, high-quality patient care is unwavering. As painful as these actions are for all of us at Essentia, we are taking these steps to ensure Essentia is here to make a healthy difference in people’s lives, today and into the future.”

The Northland's Healthcare Workers Union said they are extremely disappointed with the decision.

United SteelWorkers Local 9460 president Deanna Hughes said, "It's not just about our members losing their jobs, it's about the community and the impact that it's going to have on the families because this is going to affect everyone."

Copyright 2020 WDIO-TV LLC, a Hubbard Broadcasting Company. All rights reserved

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