Cerner Corp. laid off 255 employees on Wednesday as part of an ongoing cost-cutting effort.
That's less than 1% of the company's workforce, a spokesperson for the Kansas City, Mo.-based electronic health record vendor said in a statement.
"As mentioned in our earnings call earlier this year, we're looking to identify organizational efficiencies as we implement our new operating model," the spokesperson said. "Part of that strategy includes a realignment of resources focused on key growth areas across the company."
Cerner in April announced plans to implement a new operating model to improve efficiency and profitability. The operating model was part of an agreement with Starboard Value, an activist investment fund that owns roughly 1% of the company's outstanding stock.
The agreement involved a "board refreshment" and established a finance and strategy committee within the company's board to oversee a host of operational improvement initiatives.
Cerner has said its goal for the operating model is to improve its adjusted operating margin, targeting 20% for the fourth quarter of 2019. In 2020, the company plans to increase its adjusted operating margin to 22.5%.
During the company's second-quarter earnings call in July, Cerner CFO Marc Naughton said the company is on track to see improvements in its operating margin beginning in the fourth quarter, as a result of 165 cost cutting, portfolio management and business simplification initiatives had Cerner launched earlier this year.
Cerner did not comment on departments affected in the layoffs when asked by Modern Healthcare. The workforce reduction affected employees in various business units across the country, according to The Kansas City Star, which first reported the layoffs.
Cerner has onboarded nearly 3,000 employees since the start of 2019, with plans to hire "hundreds more" throughout the year, a spokesperson said in a statement.
In its fiscal 2018, Cerner reported $774.8 in operating earnings, down 19% from one year prior, and $5.4 billion in revenue, up 4% from 2017.
