Unexpected Company is Now Laying Off 500 Workers in Oregon

An unexpected company is now laying off 500 workers in Oregon which has drawn criticism from unions representing workers in the industry.

One week after sharing additional details about its planned merger with Legacy Health, Oregon Health & Science University told staff it’s planning to lay off more than 500 workers.

The news is drawing criticism from unions representing workers at the health care giant.

In an internal email obtained by OPB, OHSU president Dr. Danny Jacobs and senior leadership attributed the cuts to expenses outpacing costs, as Willamette Week first reported.

“Despite our efforts to increase our revenue, our financial position requires difficult choices about internal structures, workforce and programs to ensure that we achieve our state-mandated missions and thrive over the long-term,” Jacobs said in the Thursday email.

An OHSU spokesperson told OPB that the precise number of layoffs will be announced in the coming weeks.

On May 30, the health care giant announced that it’s moving forward with its planned merger with Legacy Health.

In Thursday’s email, Jacobs said that, while this news likely raises questions about OHSU’s financial situation, the investment in Legacy is funded by borrowing with 30-year bonds that “cannot be used to close gaps in our fiscal year 2025 OHSU budget or to pay our members.”

OHSU plans to hold a town hall next week to answer staff questions.

In the email, leaders said they’ll provide significant updates as soon as possible as part of their “commitment to transparency.”

They said discussions about workforce reductions will start “following the annual review and contract renewal process, with additional reductions happening over the next few months.”

“It’s outrageous and immoral that OHSU is on one hand planning to lay off 500 hard-working people and reduce patient care, while writing checks for million dollar bonuses to their top executives and adding $350,000 to CEO Dr. Danny Jacobs’ retirement account,” said Jennie Olson, president of AFSCME Local 328, in a statement.

“OHSU needs to prioritize patients and people instead of lining the pockets of people in ivory towers.”

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Also Read: Retirees Will Now Receive More Money For Social Security

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Market News Today - Unexpected Company is Now Laying Off 500 Workers in Oregon.
Market News Today – Unexpected Company is Now Laying Off 500 Workers in Oregon.

Applications for unemployment benefits now surge to new highs, a sign that the white-hot labor market is starting to cool off.

First-time applications for unemployment benefits rose last week to 231,000, the highest level since August, per CNN.

Thursday’s data also showed that the number of continuing claims, or applications from people who have filed for unemployment for at least one week, was 1.78 million.

That’s an increase of 17,000 from the prior week, according to the Bureau of Labor Statistics.

The latest numbers come less than a week after the monthly jobs report showed the US economy added just 175,000 positions in April, less than economists expected and a steep drop-off from prior months.

US employers have now added an average of 245,500 jobs per month, versus 2023’s 251,000-per-month average.

Still, hiring remains strong. Although the unemployment rate ticked up to 3.9% last month, it’s the 27th consecutive month that the jobless rate has held under 4%, matching a streak last seen in the late 1960s.

Weekly jobless claims data tends to be volatile but, while one week’s worth of data “does not a trend make,” said Chris Rupkey, chief economist at Fwdbonds.

“We can no longer be sure that calm seas lie ahead for the US economy if today’s weekly jobless claims are any indication.”

Company layoffs are picking up, hinting at caution on the part of companies as they weigh the outlook for the second half of the year,” he wrote in a note Thursday.

The Federal Reserve has been battling inflation by raising its key lending rate in the hopes of slowing the economy.

While the labor market has so far resisted those efforts, remaining white hot for the past 18 months despite 11 rate hikes from the central bank, Fed Chair Jerome Powell said last week that demand has “cooled from its extremely high level of a couple of years ago.”

Ian Shepherdson at Pantheon Economics said in a note Thursday: “We’d need to see at least a month of elevated readings to convince us that the trend really has turned.”

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Also Read: A Giant Company Now Announces Unexpected Layoffs in Virginia

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Market News Today - Unexpected Company is Now Laying Off 500 Workers in Oregon.
Market News Today – Unexpected Company is Now Laying Off 500 Workers in Oregon.

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