OHSU to Lay Off More Than 500 Workers as Costs Outpace Revenue

Oregon Health & Science University plans to lay off more than 500 staff members as costs for salaries and supplies outpace revenue, president Danny Jacobs and top leaders said in an email to staff.

The cuts come as OHSU pursues a purchase of crosstown rival Legacy Health, another health system that’s struggling with higher costs.

“Our expenses, including supplies and labor costs, continue to outpace increases in revenue,” Jacobs said in the email, which was obtained by WW. “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.”

OHSU’s press office didn’t immediately return an email seeking comment.

In April, leaders at OHSU warned staff that job cuts might be coming as they look for ways to cut costs in an “evolving health care landscape that is more challenging than ever.”

Amid the warnings about job cuts, OHSU staff learned in May that starting July 1, Jacobs will get an extra $350,000 a year put into his retirement account, according to documents provided to WW via a public records request. That’s atop the annual $161,000 in retirement benefits he was already slated to receive. Jacobs’ base salary is $1.64 million.

The layoffs are part of a “strategic alignment” at OHSU.

“One of the guiding principles of the Strategic Alignment work is a commitment to transparency and providing significant updates as soon as possible,” Jacobs said in the email.

Communications about the plan will include language about the Worker Adjustment and Retraining Notification Act, Jacobs said, which requires employers to inform workers in writing at least 60 calendar days in advance of layoffs of 500 or more full-time workers within a 90-day period.

“Uncertainty and change are difficult. We will continue to proceed with compassion, fully understanding the gravity of these decisions and the personal impact they have,” Jacobs and top officials wrote.