Allscripts Healthcare Solutions has trimmed its global workforce by about 5 percent and implemented temporary salary reductions for its highest-paid employees amid the COVID-19 pandemic, according to an internal memo obtained by Crain's.
The cuts aim to help the electronic health records company "preserve the strength of our company for the long term," the memo says. Allscripts had about 9,600 employees worldwide as of Dec. 31, a Securities & Exchange Commission filing shows.
The company did not respond to requests for comment.
Even before COVID-19 started challenging U.S. businesses, and health care companies in particular, Chicago-based Allscripts trailed electronic health records market leaders Epic and Cerner. The company posted a net loss of $183 million last year, as revenue rose 1 percent to $1.8 billion.
All affected employees, whose last day was April 15, will receive severance and other benefits in accordance with the company's policy and legal requirements, according to the memo.
Meanwhile, CEO Paul Black's salary is being temporarily reduced by 40 percent until "the company's operations have returned to normal," with the expectation that pay cuts will remain in effect for six months.
Black's 2019 salary was $1 million, but he pocketed a total of $7.5 million including stock awards and other compensation, according to a proxy statement filed earlier this month.
Employees making annual salaries of greater than $100,000 will also take temporary pay reductions, with deeper cuts for higher earners, the memo says. "Temporary salary reductions will not impact benefits, commission targets, or other variable pay targets, such as annual bonus."
The company has been pushing its FollowMyHealth telehealth platform as patients are encouraged to avoid doctors' offices and hospitals to prevent spreading COVID-19. In a March 30 statement, Allscripts said "In the last month, more than 100 clients have selected, and more than 50 clients have already implemented," the platform.
John Pletz contributed to this report.
This article was originally published in Crain's Chicago Business.