COVID-19 affects healthcare industry, leads to workforce reductions at Essentia Health


COVID-19 has now affected nearly every industry across America, and it continues to hit close to home. In a press release Thursday afternoon, Essentia Health announced approximately 900 layoffs in its facilities.

The 900 layoffs, which accounts to six percent of the workforce at Essentia Health, are on top of 850 Essentia employees on administrative leave, with benefits being paid through July 31, with the intent of being called back to work.

“Despite our best efforts, the many cost-reduction measures we’ve taken over the last several weeks are not sufficient to preserve our mission and the health of the organization,” says Essentia Health CEO David C. Herman, MD. “This has prompted our leadership team to carefully consider the most difficult decision we’ve faced since I joined Essentia five years ago and move forward with permanent layoffs.”

The health system’s operational losses due to pandemic-related declines in patient volumes since the beginning of March have totaled nearly $100 million, with more losses on the horizon.

Leaders at Essentia Health have worked to offset the significant decline in revenue while prioritizing patient and staff safety. Some of these changes have included: placing employees on administrative leave, flexing hours, reducing physician and executive leader compensation, restructuring and eliminating leadership roles, limiting capital expenditures and reducing services and discretionary spending. While surgeries and procedures are restarting at the health system’s facilities, officials are approaching that process carefully and slowly to protect the communities, patients and staff, preserve personal protective equipment and ensure available hospital beds for COVID-19 patients.