The Texas division of Catholic Health Initiatives laid off 459 employees this week as part of its ongoing restructuring plan.
The cuts, which represent less than 4% of the Texas division's workforce, affect employees at CHI St. Luke's Health and CHI St. Joseph Health. All in all, the division eliminated 620 positions, with 161 of those currently vacant.
CHI Texas Division spokesman Josh Snellgrove said the cuts are part of an ongoing restructuring plan to realign financial performance.
“While never an easy process, rebalancing our workforce allows us to more effectively manage our resources so that we are well positioned to serve the community into the future,” Snellgrove said.
The Englewood, Colo.-based health system has been in the midst of a turnaround plan to decrease debt and improve finances as it pursues a merger with San Francisco based-Dignity Health.
CHI proved last month its turnaround plan was gaining traction when it reported improved finances in its second quarter. The 103-hospital system posted operating losses of $75.6 million before charges in the quarter ended Dec. 31, compared with operating losses of $93.7 million in the year-earlier quarter. Revenue increased in the quarter to $4.2 billion from $4 billion in the year-ago period.
Despite the improvements, S&P Global Ratings and Moody's Investors Service recently downgraded CHI's debt rating two notches above junk. A S&P credit analyst said it will take “several years on the current financial improvement trajectory for CHI to return to a higher rating.”
The turnaround plan is being led by Anthony Jones, a Los-Angeles based management consultant who replaced longtime COO Michael Rowan.
If CHI's ongoing negotiation talks with Dignity lead to a merger it would create the nation's largest not-for-profit hospital company by revenue with combined annual revenue of $27.8 billion and a total of 142 hospitals.