St. Luke’s cuts 2% of workforce as COVID relief wanes but costs remain high

St. Luke’s Health system announced Wednesday that it plans to cut its workforce by 2% by April. It has already eliminated about 150 jobs through attrition, but it will now lay off nearly 200 employees over the next two months.

St. Luke’s employs more than 16,000 people, primarily at hospitals and clinics in the Treasure Valley, Magic Valley, McCall and Ketchum areas.

The layoffs will mainly affect non-clinical and administrative positions, St. Luke’s said in a news release.

Federal labor laws require large employers to provide at least 60 days’ notice of mass layoffs, in most situations.

St. Luke’s attributes the layoffs to “overlapping challenges” in the economy, including labor costs and other factors related to inflation.

Many of those factors are ripple effects of the pandemic. But the COVID-19 situation has become more manageable in the U.S., and the Biden administration is winding down the national public health emergency and the pandemic aid that accompanied it, including increased Medicare rates for COVID-19 care.

“The past three years have been a dynamic and challenging time in the health care industry and within the communities St. Luke’s serves – a trend that is expected to continue,” St. Luke’s said in the release. “Health systems across the region and nation are being impacted by overlapping challenges, including pent-up demand for services, workforce shortages, supply chain disruptions and a more complicated payment environment, among other challenges.”

St. Luke’s President and CEO Chris Roth said in the release that St. Luke’s costs are rising faster than its income from health care services.

“This trend is not sustainable, and we expect significant financial and resource pressures to continue,” Roth said in the release.

In addition to the workforce cuts, St. Luke’s said it has reduced discretionary spending and the use of contractors such as health care staffing agencies or travel nurses. It has “trimmed” executive positions, slowed hiring for jobs that don’t involve patient care, shifted its spending priorities and made other changes to cut costs, the release said.

“St. Luke’s has been thoughtful in ensuring all opportunities are carefully considered,” Roth said.

The health system will continue its efforts to hire and retain frontline health care workers, it said.