Vanderbilt CEO Jeff Balser talks about the upcoming cuts.: Vanderbilt CEO Jeff Balser talks about the upcoming cuts.
Vanderbilt University Medical Center is eliminating several hundred more jobs this week as part of its plan to cut up to 1,000 positions by the end of the year.
The cuts are expected to continue for several more weeks, and should be complete by late October.
According to a letter sent to state and city officials, Vanderbilt said the workers receiving notice would be “permanently laid off starting on November 16, 2013 and continuing until or on about December 31, 2013.” All affected employees will be given 60 days’ notice, the letter said.
“What’s happened here at Vanderbilt is today we’ve started this action, and several hundred people will be leaving the organization,” said John Howser, spokesman for VUMC.
This latest round of layoffs is part of the medical center’s plan to cut $250 million from its $3.3 billion operating budget over the next two fiscal years. Jeffrey Balser, head of the Vanderbilt University Medical Center, has told staff that the restructuring is part of a plan called “Evolve to Excel.” Financial pressures
Vanderbilt is making these job cuts, according to Balser, to prepare for various financial pressures facing Vanderbilt, including an aging population, lower reimbursement rates from insurance companies, a lack of Medicaid expansion in Tennessee and a reduction in National Institutes of Health grant funding.
Vanderbilt’s medical center generates about two-thirds of Vanderbilt’s operating revenue, according to Vanderbilt’s financial report from the 2012 fiscal year.
While Vanderbilt’s health care operations have produced positive operating results in each of the last five fiscal years, the report says, “future changes in the health care market and regulations could adversely affect future financial results of operations.”
Earlier this summer, the medical center let go up to 300 people, but that round of cuts did not count toward the final tally of 1,033 cut jobs. Vanderbilt is the region’s largest private employer with more than 20,000 employees.
Vanderbilt has mitigated its staff reduction in various ways, Howser said, including a hiring freeze that has been in place for several months and an early retirement option for some employees. About 250 employees opted to take that option in July, according to VUMC officials.
Vanderbilt must report these latest staff reductions to the state and federal governments in order to comply with a federal law called the Worker Adjustment and Retaining Notification, or WARN, Act.
The government considers a layoff a “mass layoff” when an institution cuts 500 or more jobs within a 30-day period, and employees must be given written notice of those events.
Vanderbilt also wrote to inform Johnny Orton, business manager for the Laborers’ International Union of North America, to inform the group that 32 plant services employees, including painters, electricians and medical carpenters, would permanently lose their jobs.
In a letter to Sterling van der Spuy, director of the Dislocated Worker Unit for Tennessee’s Labor and Workforce Development department, Vanderbilt said it would continue to provide information regarding the ongoing layoffs: “As additional positions to be eliminated are identified, we will notify your office at least 60 days in advance of the expected layoffs as we notify the affected employees and make available to your office the information regarding job classifications and number of affected employees.”
Employees terminated Tuesday will remain on staff for 60 days. After that period, employees that agree to Vanderbilt’s terms of separation will be eligible for the following options:
» Paid leave during the 60-day notification period;
» Separation pay based on years of Vanderbilt service, paid out at the current base pay rate for up to 22 weeks;
» Priority consideration for open positions at Vanderbilt through VU Human Resources;
» A $2,500 health care supplement to help cover health care costs or other transition expenses;
» Payout of accrued but unused balances for vacation and personal time;
» Career counseling services for all affected employees through outsourcing firm Lee Hecht Harrison and Vanderbilt Human Resources;
» 120 days of continued access to Vanderbilt child care services.
Throughout the job cuts, Balser is prioritizing openness and transparency.
“I am in town hall meeting after town hall meeting after faculty meeting after group meeting. I am trying to be out there every single day, meeting with groups, having a dialogue, hearing their concerns and feeding that back to the leadership,” he told The Tennessean last month.
He also has been communicating steps surrounding the restructuring internally via a blog called “Rounds” published on the Vanderbilt Reporter’s website.
Balser will provide another update on the medical center soon — he’s scheduled to deliver the 2013 State of the Medical Center Address on Thursday.