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Michigan Medicine to lay off 738 employees instead of projected 1,400 eliminations

Aerial view of the Michigan Medicine campus in Ann Arbor.
Aerial view of the Michigan Medicine campus in Ann Arbor. (Michigan Medicine)

ANN ARBOR – Michigan Medicine will lay off 738 employees by the end of June due to operating losses encountered by the healthcare system over the course of the COVID-19 pandemic.

The number is just over half of the 1,400 eliminations the University of Michigan hospital system had anticipated in May when it announced a series of cost-saving measures to stop a projected loss of $230 million by the end of the fiscal year.

According to a statement by Michigan Medicine spokesperson Mary Masson, the number was halved due to attrition and furloughs through the healthcare systems’ economic recovery plan.

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Those impacted by the reduction will receive pay and benefits for different periods of time based on their tenure. Employees will also have access to transition assistance.

“Michigan Medicine made safety in all our missions the top priority when determining where reductions in force would occur. These challenging but carefully considered actions will help Michigan Medicine continue to provide hope and healing to our patients and allow us to continue to support our clinical, educational and research missions,” said Masson in her statement.

In May, the hospital system announced that it had suspended merit salary increases, tuition reimbursement and employer retirement matching in order to reduce losses. Among other measures, it reduced consulting, implemented a hiring freeze on 300 positions, restructured its organization and reduced the salaries of healthcare system leaders.

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