Essentia Health officials today announced the permanent layoff of 900 employees, or 6 percent of its workforce, due to COVID-19 financial problems.
According to a news release, officials said Essentia's operational losses due to pandemic-related declines in patient volumes since the beginning of March have totaled nearly $100 million, with more losses on the horizon. The release said the company has worked to offset the significant decline in revenue while prioritizing patient and staff safety. Some of these changes have included: placing employees on administrative leave, flexing hours, reducing physician and executive leader compensation, restructuring and eliminating leadership roles, limiting capital expenditures and reducing services and discretionary spending. While surgeries and procedures are restarting at Essentia facilities, officials are approaching that process carefully and slowly to protect communities, patients and staff, preserve personal protective equipment and ensure available hospital beds for COVID-19 patients.
“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,” said Essentia Health CEO David C. Herman. “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.”
It's unknown if anyone at the International Falls location was impacted.
In addition to the layoffs, there are 850 employees 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,” Herman said. “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.”