Baystate Health in Western Massachusetts is undergoing its second round of job cuts in less than three months, announcing Tuesday that it is eliminating 98 corporate positions.
The job cuts, which will affect both current employees and vacant roles, is the latest cost-saving move from Baystate Health, the operator of Baystate Medical Center in Springfield and three smaller hospitals in Greenfield, Westfield, and Palmer. Over the last year and a half, the financially beleaguered health system has slashed leadership jobs, sold off laboratory assets, and delayed pay raises.
In a memo sent to employees and obtained by the Globe, Baystate president and CEO Peter Banko said that the affected departments include finance, human resources, legal, information technology, marketing and communications (through a restructuring), diversity, equity, and inclusion, and philanthropy.
“Our corporate functions are better aligning to national benchmark standards for both overhead expenses and productivity,’’ Banko wrote.
The cuts amount to less than 1 percent of the nonprofit health system’s workforce, the memo said, and the company is “working to find alternate positions for those whose roles were eliminated.’’ “Individual discussions with those impacted’’ will take place no later than this Friday, the memo added. Baystate has a workforce of more than 13,330 employees.
Banko’s memo also reiterated previous financial goalposts for the company: It aims to save $225 million over the next two years, and invest $1.2 billion in “operations and growth,’’ such as a planned renovation of the emergency department at Baystate Noble Hospital in Westfield. Baystate reported its total operating revenue in fiscal year 2023 topped $3.1 billion.
“Our disciplined focus on core operations and strategic growth must become part of our daily routine,’’ wrote Banko, who stepped into the chief executive role in June of last year. A spokesperson for Baystate noted that the health system continues to “aggressively recruit’’ physicians, caregivers, and other providers. Banko has promised that patient services will not be diminished.
The cuts follow a similar move in November, when Baystate announced it was cutting 134 leadership positions, just months after announcing the departure of three senior vice presidents.
“We are significantly decreasing management spans and layers to improve efficiency, reduce costs without impacting bedside care, streamline decision-making, and better enable our caregivers,’’ the health system said in a statement in November.
Like many of its peers, Baystate has been in the red in recent years. A spokesperson confirmed to the Globe that Baystate shouldered a $61 million operating loss in fiscal year 2024, which ended in September. That’s a slight improvement from the $63 million loss in 2023, but leaps and bounds better from its $178 million hole in 2022 as the pandemic battered the health care industry. In its November layoff announcement, Baystate said the operating losses had taken their toll.
“This weakened financial position has severely limited our organization, especially our ability to invest in our people and grow to meet community needs,’’ the health system said.
The cuts come at a precarious time for the Massachusetts health care industry, which has been struggling under the weight of rising expenses, labor shortages, and varying insurance reimbursement levels. Massachusetts facilities have also been stretched thin by the collapse of Steward Health Care and the subsequent closure of two of the bankrupt system’s former hospitals.
In hospital fiscal year 2023, Baystate was responsible for more than 55,000 discharges and nearly 200,000 emergency department visits, according to state data.
Jonathan Saltzman of the Globe staff contributed to this report.
Dana Gerber can be reached at dana.gerber@globe.com. Follow her @danagerber6.
