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Fairview Health Services to lay off 250 employees by year's end

by John R. Fischer, Senior Reporter | November 15, 2023
Business Affairs
Photo of University of Minnesota Medical Center, courtesy of M Health Fairview
Months after calling off its merger with Sanford Health in South Dakota, Fairview Health Services, in Minnesota, has announced that it is eliminating 250 positions.

While the health system did not name the failed deal as a reason for the layoffs, it did attribute them to inflation, high labor costs, and other financial pressures, factors that it was hoping to address through the merger.

The company, which employs 34,000, notified employees on November 2 of the cuts, which pertain to both full- and part-time positions. It did not specify how many employees would lose their jobs, as some positions are currently not filled, but said that those affected would have "priority hiring opportunities for one of the 1,600 available positions in our system," according to the Star Tribune.

"Strategic changes like this allow us to invest in the services we provide for our patients while supporting programs and care across our hospitals and clinics,” James Hereford, Fairview president and chief executive officer, said in an email to employees.

Servicing patients in Northern Minnesota and the Twin Cities and its surrounding areas, Fairview comprises the University of Minnesota Medical Center in Minneapolis and Fairview Southdale Hospital in Edina. It also jointly runs M Health Fairview with the University of Minnesota and owns the university’s teaching hospital.

While reporting financial gains in Q3, the health system has faced consecutive operating losses for four years and is working to reduce its overhead, including relying less on travel nurses and other forms of contract labor.

Its merger with Sanford, which would have created one of the largest healthcare systems in the U.S., and that was estimated to be worth $14 billion, collapsed in July due to its planned headquarters being in Sioux Falls, a point of contention with the university, which also expressed concerns about an out-of-state healthcare provider managing its teaching hospital.

Both Fairview and the university are deciding whether to extend their long-term affiliation, which expires at the end of 2026, with Fairview officials saying the current agreement needs to change.

Fairview expects to “generally” finalize layoffs to “generally” by the end of the year, reported KSTP-TV.

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