Ochsner to lay off 770 employees in Louisiana and Mississippi

Ochsner Health is laying off 770 employees in Louisiana and Mississippi, a company spokesperson confirms to Axios. NOLA.com | The Times-Picayune broke the news Thursday morning.

Why it matters: Ochsner is the largest health system in Louisiana and the state's largest private employer, per info from the company.

• The layoffs represent about 2% of the organization's workforce, according to an email sent to employees Thursday.

Driving the news: Ochsner CEO Pete November in his email said the cuts are due to increased labor costs, high inflation and the end of federal pandemic relief funding, among other reasons.

• The cuts are expected to save Ochsner between $125 million and $150 million annually.
• Ochsner lost about $96 million last year, NOLA.com reported, marking its first unprofitable year in more than a decade.

What’s happening: No physicians will be laid off, November wrote.

• The cuts are mainly in management and "non-direct patient care roles."
• Employees who are being laid off received a calendar invite for a meeting Thursday.
• They will get full pay and benefits for up to 65 days depending on their work schedule in addition to severance packages.

Of note: Ochsner told NOLA.com it will not close or consolidate its 42 hospitals or 200+ health facilities in Louisiana and Mississippi.

• The hospital system does not plan additional "systemwide" reductions, an Ochsner spokeswoman tells us.

Flashback: The health care system started when Alton Ochsner and four colleagues opened New Orleans’ first multi-specialty group in 1942. In 2021, Ochsner Health, a nonprofit organization, treated more than 1 million people.

Big picture: The cuts come during a period of change in New Orleans’ health care landscape, primarily driven by LCMC Health, Ochsner’s closest rival.

• In 2020, LCMC finalized its purchase of East Jefferson General Hospital for $90 million.
• LCMC in January finalized its $150 million purchase of three Tulane hospitals, including Tulane Medical Center, but the deal is being challenged by the Federal Trade Commission.

Editor’s note: This story has been updated with additional information from Ochsner.