Lifespan announces layoffs, early retirements

PROVIDENCE – Lifespan Corp. has initiated a round of layoffs and early retirements, the health care provider announced on Thursday.

The organization, which along with other health care providers will be on the front lines of the state’s response to the global COVID-19 pandemic, laid off 55 individuals from its corporate-services office. Another 216 employees have agreed to retire by March 28. Lifespan said 400 workers had been eligible for its voluntary, accelerated early-retirement program.

Lifespan said 87 positions were eliminated in the organization, including 24 vacant positions and eight corporate positions which were part of its early-retirement program.

Lifespan said the reduction is a 5% decrease in its corporate workforce. The reductions were described as “initial staff-reduction efforts.”

- Advertisement -

Dr. Timothy J. Banineau, Lifespan CEO and president said in a statement, “… further position reductions will be necessary to achieve the financial stability that is required. We greatly value the contributions of all our staff and deeply regret the need for any job loss. Our first instinct is always to protect our workforce, particularly our frontline employees.”

Lifespan reported a $23 million operating loss in fiscal 2019 in a report in December. At the time, the health system attributed the poor results to a cut of nearly $25 million to Medicare rates, increased demand at its two major hospitals after the closure of Memorial Hospital and fewer patients with private insurance.

“Nearly a year ago, Lifespan began working on a restructuring strategy in recognition of the uniquely difficult market in which we operate,” said Babineau. “Almost 70 percent of our patients now have public insurance [Medicare and Medicaid] – which does not cover the cost of the care we provide. Despite these financial challenges, more and more patients continue to choose Lifespan as their preferred provider – a testament to the quality of care we deliver and our caregivers.”

Lifespan worked with a consulting firm Alvarez & Marsal on restructuring efforts, including the voluntary early retirement plan for employees.

“While our financial challenges began well before the COVID-19 virus outbreak, we are reminded by recent events of the unique, essential and lifesaving role our doctors, nurses and all our health care providers play in caring for our community,” continued Babineau. “ Lifespan’s viability as an essential community asset requires financial stability to ensure we can continue as the state’s largest and most important health care system.”

Babineau said that the health system would continue its restructuring efforts in 2020, seeking efficiencies and economies of scale. 

Lifespan is working with the R.I. Department of Labor and Training to support impacted workers, it said, establishing an Employment Resource Center to retrain and redeploy those affected by layoffs.

Babineau said that Lifespan was focused on “ensuring that care is protected at the bedside,” amid the layoffs.

Chris Bergenheim is the PBN web editor. You may reach him at Bergenheim@PBN.com.