Home Industries Health Services Lifespan lays off 20% of executives

Lifespan lays off 20% of executives

By

Katie Castellani

-

09/23/2024

Rhode-Island-Hospital — LIFESPAN CORP., the state’s largest employer and health system is laying off 20% of its executive staff, CEO John Fernandez said in a statement Friday./COURTESY OF LIFESPAN CORP.

PROVIDENCE – Lifespan Corp., the state’s largest employer and health system, is laying off 20% of its executive staff. CEO John Fernandez has not said how many employees have been laid off, but the cuts will save the health system $6 million in fiscal year 2025, which begins Oct. 1. “Lifespan implemented a strategic restructure

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PROVIDENCE – Lifespan Corp., the state’s largest employer and health system, is laying off 20% of its executive staff. CEO John Fernandez has not said how many employees have been laid off, but the cuts will save the health system $6 million in fiscal year 2025, which begins Oct. 1. “Lifespan implemented a strategic restructure focused on creating a one-system, one-team approach, designed to reduce executive overhead and streamline operations,” Fernandez said in a statement shared with Providence Business News. “Starting from the top like this, allows us to allocate more resources directly to patient care and support areas.” The layoffs, announced Sept. 20, come as Lifespan is rebranding as “Brown University Health” through an affiliation agreement with Brown University. Also, the health system is in the process of purchasing two Massachusetts hospitals – St. Anne’s in Fall River and Morton in Taunton – from Steward Health Care, which filed for bankruptcy in May. Lifespan offered $175 million for the hospitals and the transaction is expected to close by Oct. 1. Financial reports show Lifespan has fallen behind on its fiscal targets for the year. Throughout the first three quarters of the fiscal year, Lifespan has reported a $71.5 million operating income. But this was largely because of one-time or unusual items, and without them the health system would have reported a $5 million loss and be $70.8 million behind its budgeted operating income for the period. Though this doesn’t come as a surprise as Peter Markell, Lifespan’s chief financial officer, said earlier this year that the health system was likely not going to hit its goal of a 3% operating margin for 2024. Though Markell told reporters in August the health system’s fiscal year 2025 budget has Lifespan reaching a 3% operating margin. “But we have to execute on some things,” he said. Markell also said he expects purchasing the hospitals from Steward could help Lifespan reach its financial goals in 2025. This is because the health system will be able to spread overhead costs and the two hospitals are expected to contribute $500 million to Lifespan’s annual revenue, which is around $3 billion. A spokesperson for Lifespan did not immediately respond to PBN’s questions on the number of employees affected or the timing of the layoffs. Katie Castellani is a PBN staff writer. You may contact her at Castellani@PBN.com.