Essentia Announces Plans to Layoff 900

DULUTH, Minn.-Essentia Health has announced they are planning to layoff about 900 employees, with more than 50 percent coming from Twin Ports hospitals.

Leadership from Essentia say the layoffs are happening due to operational losses from the coronavirus pandemic.

“At Essentia, our 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,” Essentia Health said in a statement. “We have worked to offset the significant decline in revenue while prioritizing patient and staff safety.”

Essentia will continue to provide health insurance for non-contract employees for the next three months. Staff covered by collective bargaining agreements have other protections, including the right of recall.

“This is really painful for us the reason we are doing this is because we will be post COVID at some point we will be on the other side of this and we need to be there to care for people not just through COVID but for everything else that follows,” said Dr. Jon Pryor, the president of Essentia Health’s East Market.

The United Steelworkers Local 9460 is one of the region’s healthcare worker’s unions responded on Thursday in a statement on Facebook to the news of the layoffs.

“We are very disappointed with how Essentia has chosen this uncertain time to reduce staff when our families and communities are most vulnerable. This is not a fight we wanted, nor one that we picked, but we will fight back rather than accept layoffs,” said the union.

Essentia is currently in the middle of the $800 million Vision Northland project along Superior Street, but that money spent on that is dedicated to the building project now.

“When you sell bonds to fund that building there are covenants that you can only use that money for the hospital so if we stopped we’d have to give that money back to the bondholders and pay a significant penalty and we’d be left with a hole in the ground,” said Dr. Pryor.

Employees laid off will be notified on a rolling basis over the next few days and into early next week.

The link to the complete union statement can be found here.



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