St. Charles will layoff 105 workers this week in addition to eliminating 76 already vacant positions, the health system announced Wednesday. St. Charles blamed flat revenue along with increased costs for supplies, equipment and contract labor during the COVID-19 pandemic.
Those workers will be losing their jobs over the next three days. St. Charles said it will be targeted to non-clinical areas. They were identified by a data review process that indicated it has more staff than other health systems of similar size.
“In particular, many leadership positions are being eliminated to bring our structures into alignment with other health systems of our size,” St. Charles President and CEO Joe Sluka said in a letter to staff and the community. St. Charles did not immediately identify which hospitals would be impacted.
St. Charles said there was an “imbalance” that started in 2020 when costs began to skyrocket while the system was forced to reduce elective surgeries due to COVID-19 pandemic restrictions. Hospitals also needed to keep beds open to care for COVID-19 patients. The issues continued through 2021.
Sluka described the situation as feeling “unfair” after the work caregivers have performed during the last two years of the pandemic.
“While our financial situation isn’t unlike many other health systems around the country, this decision hurts. These are our people,” Sluka said in a statement.
St. Charles said it is facing an operating loss of approximately 6.7% for 2022 to date, having lost $21.8 million through April. It said the layoffs would reduce annual expenses by $20 million, but it won’t prevent the system from experiencing “substantial operating loss” in 2022.
This comes after St. Charles said it reduced expenses and looked for ways to raise revenue. It also had to pay back more than $95 million in federal funds it received the last two years to support operations, St. Charles said.
“It has taken two long years of the pandemic to get us into this situation,” Sluka said, “and it will take at least two years for us to get out of it. But we will”