Detroit hospital announces mass layoffs due to revenue downturn

Beaumont Health CEO John Fox is reported to take a 70 percent pay cut, while other executives are taking up to a 45 percent pay decrease.

Of the 2,475 employees being laid off, the majority involve administrative staff and other positions that do not involve caring for patients. The lion’s share of the 450 positions being eliminated are extensions of the corporate staff or are serving in other administrative roles.

Over 2,000 Canadian healthcare workers cross into Detroit from Windsor, Ontario each day to work in metro Detroit hospitals.

According to Detroit News, 57 nurses who hold dual positions in Windsor and Detroit had to make a decision on which hospital they wished to continue working in. Thirty-five of the 57 gave up their jobs in Detroit to keep their positions at Windsor, while the remaining 22 nurses gave up their Windsor posts to keep working in Detroit.

“I am extremely proud of our team’s rapid response to COVID-19,” Fox said in a statement. “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.”

“We also expect economic pressures on Beaumont and the healthcare 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.”

According to Beaumont’s first quarter financial reports, which ended March 31, it had lost $407.5 million compared to its revenue over the same period in 2019. Operating revenue had dropped by $78.2 million over that same period.

Fox expects that these numbers will only continue to worsen throughout the second quarter of the year.

“Through this crisis, we have dramatically changed the way we care for patients. We have seen exponential growth in telehealth, new approaches to staffing and a regional perspective to deploy resources and assets,” reads Fox’s statement.

“We will continue to adapt our health care system to deliver the best, compassionate, extraordinary care every day. Despite an uncertain future, I am confident Beaumont will emerge from this crisis as a strong organization.”

Those whose jobs have been dissolved will receive a lump-sum severance package, as well as access to enhanced state and federal unemployment benefits.

Other affected employees will be eligible to apply for other openings at Beaumont and will be given priority over outside applicants.