900 Workers To Be Laid Off As Essentia Health Struggles Bear Financial Impact Of COVID-19
MINNEAPOLIS (WCCO) -- Essentia Health announced Thursday that it is permanently laying off 900 employees -- about 6% of its workforce -- due to the financial impact of responding to COVID-19.
In a statement, Essentia said the layoffs come as the health care provider has lost nearly $100 million since March, with more losses expected in the future.
"Despite our best efforts, the many cost-reduction measures we've taken over the last several weeks are not sufficient to preserve our mission and the health of the organization," said Essentia Health CEO Dr. David Herman, in a statement. "This has prompted our leadership team to carefully consider the most difficult decision we've faced since I joined Essentia five years ago and move forward with permanent layoffs."
Essentia Health says it will continue to provide insurance for laid off noncontract workers for the next three months. Those covered by collective bargaining agreements will keep protections, such as right of recall.
Essentia, which is headquartered in Duluth and serves patients in Minnesota, Wisconsin and North Dakota, says it has taken several measures to stem the financial bleeding, such as cutting physician and leader pay, flexing hours, and furloughing employees.
But like other health care providers across Minnesota, Essentia was unable to perform elective surgeries for weeks under Gov. Tim Walz's stay-at-home order. As such, Essentia saw a massive loss in revenue, which isn't quickly being made up now that elective surgeries are again allowed.