SAN DIEGO (KGTV) – Sharp HealthCare announced on Monday that it will lay off more than 300 employees, citing rising costs and challenging economic conditions.
In a statement, Sharp HealthCare said 315 workers -- about 1.5% of its workforce -- would be cut “across all levels of the organization.”
Furthermore, Sharp's executives are also taking cuts to their salaries. Senior executives will face a 15% reduction, including Chris Howard, Sharp HealthCare's President and CEO. Howard elected to take an additional 10% cut, which means he will take a 25% reduction to his salary in total.
Additionally, the health care provider confirmed that hours would be reduced for some positions.
“The vast majority of these positions are in nonclinical areas of the organization, resulting in minimal impact to direct patient care,” Sharp HealthCare said.
ABC 10News spoke to one employee who was laid off; however, they asked not to reveal their identities as their severance plan has not been finalized yet.
"I couldn't even actually look at them when they're telling me this, that it was actually happening," said the former Sharp employee who was laid off Monday after working for there for more than 26 years. "26 years is like a marriage. Just to have your heart pulled out immediately without notice, just really hurts inside."
A spokesperson for Sharp stated that the roles eliminated included HR, IT, and Marketing positions, among others.
The spokesperson added that the employees will be employed and paid as usual until Sept. 2nd, then they will receive their severance package after that time.
Sharp HealthCare’s full statement:
The economic conditions in health care have dramatically changed over the last five years, and it has become increasingly clear that Sharp HealthCare is not immune to the related challenges. To navigate these changes and maintain Sharp’s position as San Diego’s health care leader for generations to come, the organization has made the extremely difficult decision to reduce its workforce. This includes the elimination of 315 employees (1.5% of the workforce) across all levels of the organization — including senior executive leadership — as well as reductions in hours and role adjustments for some positions. The vast majority of these positions are in nonclinical areas of the organization, resulting in minimal impact to direct patient care.
Additionally, senior executive compensation will be reduced by approximately 15%, and Chris Howard, Sharp HealthCare President and CEO, has elected to reduce his compensation by an additional 10%. Several expenses in mostly nonpatient care areas will also be reduced so that Sharp can continue to provide full-service, high-quality care to San Diegans.
“Our employees are the heart of our organization, and we value each and every one of them,” Howard says. “We do not make these decisions lightly nor without compassion for those impacted, and we are committed to supporting those affected during this challenging transition with career transition support, severance packages, extended health care coverage and other resources to assist them in continuing their careers.”
According to Howard, this unfortunate but necessary action follows a lengthy and comprehensive market review and thorough analysis of key financial challenges facing Sharp and health systems nationwide. These include rising costs consistently outpacing revenues because of increasing labor costs; capital expenditures related to state-mandated seismic requirements; and inadequate reimbursement from Medicare, Medi-Cal and commercial payers.
“The daunting financial headwinds health care systems nationwide have been facing are not letting up,” says Brett McClain, Sharp HealthCare Chief Operating Officer. “While workforce reductions are always our last choice, we had to act now to align our resources with strategic priorities, navigate the financial challenges in health care, and ensure long-term organizational sustainability.”
Sharp assures the San Diego community that there will be no impact on the extraordinary level of care they expect and receive from Sharp. The health system has served the San Diego community for seven decades, and these actions, combined with ongoing growth initiatives, are expected to strengthen the organization for decades to come.
“With The Sharp Experience, including exceptional patient care serving as our North Star, we will continue to fulfill our mission of improving the health of those we serve with a commitment to excellence in all that we do,” Howard says. “We are grateful for all of our team members, who consistently provide exceptional service to our patients, community member,s and one another.”
Last week, UC San Diego Health announced it was laying off over 200 employees.
