Tenet Healthcare Corp., Dallas, cut staffing by 800 full-time equivalents in the third quarter as managers reacted to a sharp drop in volume in July, company executives said. The staff cuts amount to savings of nearly $40 million annually, Chief Financial Officer Biggs Porter said.
Tenet cuts 800 jobs amid fall in volume
Comparing hospitals in continuing operation for the third quarter with 2009's third quarter, admissions declined 3.5% and adjusted admissions declined 1.8%, according to Tenet's earnings release. Fewer deliveries of newborns accounted for about a third of the drop in Tenet's admissions, according to the company.
The volume losses were concentrated, as seven hospitals in six different states accounted for 70% of the drop in admissions compared with 2009's third quarter, Tenet CEO Trevor Fetter said. There was no common thread to explain the volume losses, Fetter said. Physician-owned competition was a factor at two of the hospitals, he said.
Tenet's third-quarter net income of $932 million includes a one-time recognition of $981 million in tax benefits from net operating losses that the company suffered in previous years. For accounting purposes, these tax benefits are recognized only when a company has rebounded from a series of losses with sustained and sustainable profits, Porter said.
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