Cleveland Clinic announces 114 layoffs due to financial challenges

Cleveland Clinic’s main campus

Photo: Courtesy Cleveland Clinic

Cleveland Clinic has announced the layoff of 114 nonclinical employees due to financial challenges.

“We made the difficult decision to reduce the number of administrative management positions across our organization,” a company spokesperson said. “

WHY THIS MATTERS

The layoffs affect 114 of 83,000 employees in administrative manager positions. These are not specific to a department, the health system said.

“Due to the financial challenges facing the healthcare industry, we have restructured areas within the organization to better align with today’s healthcare environment’s needs and drive operational efficiencies,” Cleveland Clinic said by statement. This change impacts 114 caregivers across the organization. This reduction is not specific to one department, rather administrative manager positions in various nonclinical areas.”

Those affected can apply for other jobs throughout the organization or may opt to accept a severance package, the health system said.

“We continue hiring and have many job openings across the health system,”. Cleveland Clinic said.
 
THE LARGER TREND

Cleveland Clinic in 2024 had an operating margin of around 1.2%, according to the most recent financial statement for the period ending September 30, 2024. The statement showed improved financial performance.

Operating income for the third quarter of 2024 was $43.4 million on total unrestricted revenues of $4 billion, resulting in 1.1% operating margin, as compared to an operating loss of $14.9 million and an operating margin of -0.4% in in the third quarter of 2023.

Operating income for the system in the first nine months of 2024 was $138.9 million on total unrestricted revenues of $11.8 billion, resulting in a 1.2% operating margin, as compared to an operating loss of $4 million and a break-even operating margin in the first nine months of 2023. 

The improved operating performance in the first nine months of 2024 resulted from a 9.6% increase in operating revenues, supported by strong patient demand for both inpatient and outpatient services, that outpaced an 8.3% increase in operating expenses compared to the same period in 2023. 

Overall, the system reported an excess of revenues over expenses of $895 million in the first nine months of 2024, a 7.1% total margin, compared to an excess of revenues over expenses of $353 million in the first nine months of 2023.

Email the writer: SMorse@himss.org