DETROIT – Beaumont Health announced Tuesday that it would be temporarily laying off thousands and cutting hundreds of other positions due to financial losses caused by coronavirus (COVID-19).
According to Beaumont, 2,475 employees will be temporarily laid off and 450 positions will be permanently cut, while executive pay will be reduced.
Most of the temporary layoffs are hospital administrative staff and others who are not directly caring for patients, Beaumont said, while most of the eliminated positions are part of the corporate staff or are serving in other administrative roles.
“We had two weeks of COVID-19, and we lost $75 million in our operations. You might as well consider that cash,” said John Fox, Beaumont CEO. “And in April, it will be worse. So, we have the financial resources to absorb that. We did planning around that with lines of credit and other mechanisms, but it’s not unlimited."
Fox’s nearly $2 million salary will be slashed by 70 percent. Other executives will see their salaries cut 45 percent.
During the COVID-19 pandemic, many of the hospitals’ operations have been halted as the care shifted to the virus. This has caused Beaumont to be strapped for cash.
“We basically went through the organization and said, ‘We’re going to be under this cloud for at least two years, probably longer, and we are financially hemorrhaging,” Fox said. “This is overwhelmingly a temporary layoff. As soon as the patients come back and we can build back those volumes, we’ll want to bring the people back.”
Beaumont did lump sum separations, and those laid off can keep their health care. Most of the laid off employees are from clerical ranks, and they will have the first shot at positions that open up in the future.