About 900 employees — approximately 6 percent of Essentia Health’s workforce — are being laid off as the non-profit healthcare provider faces operational losses of nearly $100 million.
It’s the second announcement of job cuts in two days by major Duluth employers. On Wednesday, it was revealed that AAR is shuttering its aircraft maintenance base. The firm employs about 300 people. Both companies are being negatively affected by the COVID-19 pandemic.
Hardships caused by the pandemic continue to grow, Essentia said in a Thursday announcement, with Minnesota hospitals and health systems expecting to lose almost $3 billion in the first three months of this year. At Essentia, operational losses are related to declines in patient volumes since the beginning of March. Additional losses are expected, Essentia said. The company did not say how the losses will affect the development of its new Duluth medical campus.
“Despite our best efforts, the many cost-reduction measures we’ve taken over the last several weeks are not sufficient to preserve our mission and the health of the organization,” Essentia Health CEO David C. Herman, MD, said in a news release. “This has prompted our leadership team to carefully consider the most difficult decision we’ve faced since I joined Essentia five years ago and move forward with permanent layoffs.”