Tenet loses $366 million, will cut 1,300 jobs as for-profit struggles continue
Cost-reduction plans will largely consist of staff cuts and contract renegotiation with suppliers and vendors, system said.
Credit: Tenet
Dallas-based healthcare giant Tenet Healthcare will cut 1,300 hundred jobs as part of a plan to cut $150 million from its operating expenses, the system announced.
Hailing an "enterprise-wide cost reduction initiative," the plan will largely consist of staff cuts and contract renegotiation with suppliers and vendors. Tenet said they expect to fully realize the savings by the end of 2018.
[Also: Tenet CEO Trevor Fetter steps down as part of previously-announced transition]
Roughly 75 percent of the savings is expected to come from the company's hospital operations segment, specifically cutting a regional layer or management. Tenet will also trim within its ambulatory and Conifer business segments.
Tenet has predicted restructuring costs totaling about $40 million in the fourth quarter of 2017 related to employee severance payments that will begin that quarter.
[Also: Tenet offloads Arizona hospital citing decline in community demand for services]
"The cost reduction program we announced today includes a number of structural changes in the way we operate, all intended to reinforce accountability, improve agility and speed decision making," said Ronald Rittenmeyer, executive chairman and current CEO. "We believe these changes will help us drive organic growth, expand margins, and better support our hospitals and other facilities in delivering higher levels of quality and patient satisfaction."
Tenet shared the plans as they reported a $366 million operating loss in the third quarter, according to the company.
[Also: Tenet posts $56M operating loss for second quarter]
Tenet also trimmed it operations back in August, when they sold three acute care hospitals and one long-term acute care hospital to HCA Healthcare Gulf Coast Division.
The sales included Houston Northwest Medical Center, Cypress Fairbanks Medical Center Hospital, Park Plaza Hospital and Plaza Specialty Hospital. HCA also bought Tomball Regional Medical Center earlier this year.
Twitter: @BethJSanborn
Email the writer: beth.sanborn@himssmedia.com
