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Catholic Health Initiatives announces 620 job cuts in Texas

by Thomas Dworetzky, Contributing Reporter | April 03, 2017
Business Affairs
Catholic Health Initiatives (CHI) St. Luke's Health System will be cutting jobs in Texas.

It announced that it will reduce staff by 620 positions, according to KPRC Houston.

“Of the positions impacted, 161 were vacant positions that will not be filled and 459 employees are leaving our organization,” according to the company.

The cuts to positions were less than four percent of the overall workforce of CHI's 17 hospitals, physician network, freestanding emergency centers and other facilities in the division.

"Like other hospital systems here in Texas and across the nation, we recently announced that we are working to restructure the CHI Texas Division to respond to continued changes in the health care environment,” the chain said in a statement.

It called “significant” the improvements made as a result of organizational changes in recent months, but stressed that “critical” further moves were needed to “realign our financial performance to sustain and grow our network of care across southeast Texas.”

In late March, Moody's downgraded CHI's long-term debt to Baa1 with an ongoing negative outlook.

“The negative outlook reflects the persistent decline in operating performance since 2012. The inability to show material improvement in operating performance, and failure to execute on turnaround strategies, or the continued weakening of balance sheet measures, would likely lead to a further downgrade of the long-term and short-term ratings,” noted the agency.

Noting that the process is “never easy,” CHI maintained that, “re-balancing our workforce allows us to more effectively manage our resources so that we are well positioned to serve the community into the future."

The announcement “brought the total number of cuts at Catholic Health Initiatives' Texas division since August to 1,295,” according to the Houston Chronicle, which called the “purge” the biggest layoff yet.

The hospital system's growth in the last five years might be part of the problem, one analyst told the paper.

Bigger is not always better," Dallas-based Senior Director and Analyst for S&P Global Ratings Kevin Holloran told the paper. "Bigger is sometimes just bigger. You have to be able to make things work."

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