(WWJ) Another hospital system in metro Detroit has announced plans to lay off employees.
Due to what it calls the "devastating impact from the COVID-19 pandemic," Henry Ford Health System said Wednesday it's making the difficult decision to temporarily furlough some of its workforce.
The approximately 2,800 employees being furloughed across the six-hospital system are those not directly involved in patient care, from areas where workloads have been drastically reduced or where operations have been temporarily closed amid the virus crisis, HFHS said.
Employees will keep their healthcare coverage and are eligible for unemployment benefits.
The layoffs are taking place this week.
"I know that news concerning furloughs is painful – especially for an organization like ours, whose greatest strength has always been our people," wrote Henry Ford's President and CEO, Wright Lassiter, III, in an email to employees. "We value each team member's unique contribution and this decision does not change that. But, we must face these realities head on."
Those realities, HFHS said, include a $43 million loss in operating income during the month of March due to the postponement or cancellation of services and procedures, temporary site closures, and an increased need for resources to care for COVID-19 patients, including personal protective equipment for team members. Losses for April and May 2020 are expected to surpass the loss of March 2020.
"For more than 100 years we've been a trusted partner in our region and we have an obligation to position ourselves to continue serving our communities long after this crisis is over," continued Lassiter. "We will do this with a balanced approach by reducing expenses, pacing planned capital projects and identifying resources in our day-to-day operations. We'll continue to aggressively pursue funding through federal and other assistance programs as well."
Additionally, the health system's executive team and senior leaders will also begin contributing between 10% - 25% of their salaries to two funds created to help employees: the COVID-19 Emergency Needs Fund, established during the current crisis, and the Bob and Sandy Riney Helping Hands Fund, established in 2012 by Henry Ford's President of Healthcare Operations and Chief Operating Officer Bob Riney and his wife Sandy to support employees experiencing unexpected hardship.
This announcement comes just a couple of days after Beaumont Health System announced it will lay off 2,475 employees, 450 of them permanently, due to "dire financial effects" of the COVID-19 pandemic.
As of March 31, 2020, Henry Ford Health System's net loss was $234.5 million, a decrease of $354.9 million over the same period in 2019, the company reported. The postponement of non-time sensitive procedures, surgeries and appointments, combined with the temporary closing of several outpatient medical centers has resulted in nearly a 50% reduction in patient services revenue for the most recent past week in April, as compared to the prior year.
