Philadelphia-based Jefferson Health will reduce its workforce by 1% in the face of growing financial pressures.
The cuts will impact between 600 and 700 of its 65,000 employees, the system told Healthcare Dive on Friday. The company has not specified what roles will be impacted.
Jefferson Health, which operates a health plan and 32 hospitals across Pennsylvania and New Jersey, cited growing headwinds as the reason for the layoffs.
“Like many organizations in healthcare and higher education, we are facing significant financial headwinds,” said CEO Dr. Joseph Cacchione in a statement. “To sustain our mission and continue serving our communities, we must take thoughtful, strategic actions to align our operations for the future. While these decisions are never easy, they are necessary to ensure Jefferson remains strong and able to invest in expanding access to care, advancing innovation and supporting those who rely on us most.”
Fitch Ratings revised Jefferson’s outlook rating from “stable” to “negative” earlier this week, citing pressure on Jefferson’s operations and its limited ability to improve reimbursement rates from payers.
The system reported a $196 million operating loss for its fiscal year 2025, a decrease from its $1.3 million operating profit in 2024.
In an interview with the Philadelphia Business Journal last month, Cacchione blamed the system’s financial struggles on problems facing its insurance business, including higher-than-expected utilization among its Medicaid population and rising costs associated with GLP-1s. The executive said the health system would have to make hard decisions over the next three years to reverse losses, which could include layoffs.
Jefferson has already cut headcount this year. In March, the health system let go 171 employees from Jefferson locations and about 100 workers from its Lehigh Valley Health Network facilities. The systems merged in 2024.
In 2023, Jefferson collapsed its five operating divisions into three — cutting an unspecified number of jobs in the process — in an effort to cut costs, according to report from the Philadelphia Inquirer.
Providers nationwide are shedding workers in response to operational pressures. Providence, NewYork-Presbyterian Health System, the University of New Mexico Hospital, Penn Medicine, Yale New Haven Health, Mass General Brigham and Memorial Sloan Kettering are among the systems that have made changes to their teams in recent months, often citing concerns about growing financial challenges.
