M.D. Anderson Cancer Center announces plan to cut 1,000 jobs

M.D. Anderson Cancer Center announces plan to cut 1,000 jobs

The University of Texas M.D. Anderson Cancer Center has announced cost cutting measures which would result in layoff or early retirement for nearly 1,000 workers. The job cuts won’t impact doctors but other staff members and accounts for nearly 5 percent of total workforce of M.D. Anderson Cancer Center. During a press conference, M.D. Anderson Cancer Center officials informed that job cuts will save $120 million per year for the organization.

All the jobs facing cuts are in Houston. The official statement informed that nearly 800-900 jobs will be cut. Nearly 100-200 will be reduced by retirement or attrition. Expect for clinical staff, the job cuts will impact all other departments. Nearly 120 jobs will be in management or VP roles at M.D. Anderson Cancer Center.

In Houston, M.D. Anderson Cancer Center employs nearly 20,000 and is regarded as one of the largest employers in Houston. The layoffs started on Thursday and officials informed that they will be finished within a week. The official statement has not shared financial details of severance package offered to employees included in current layoff.

M.D. Anderson Cancer Center registered loss of $100 million last quarter. The prestigious organization registered loss of $266 million during 2016 fiscal year. In year 2015, M.D. Anderson Cancer Center reported $157 gain. The financial problems started at M.D. Anderson Cancer Center after its transition to electronic health record system in 2016. The transition led to physicians and other staff members to spend more time on learning to work with electronic record system and spend less time on patients. M.D. Anderson Cancer Center also hired temporary staff to deal with transition issues.

M.D. Anderson Cancer Center still remains in strong financial health. The organization receives donations and has other revenue streams as well. The current layoff is the largest announced by prestigious healthcare institute.

The official statement added, “We primarily focused on those areas where we could make staff reductions, re-engineer administrative support, and not impact quality of patient care.”

M.D. Anderson CFO Dan Fontaine informed, “We probably do not have a positive operating margin for the month of December. In the first quarter of this fiscal year, M.D. Anderson lost a combined $102 million in September and October in operating income, but only $9 million in November.”

Announcing the move, Dr. Ron DePinho, president of MD Anderson said, "We must act now to protect our ability to continue investing in our mission to end cancer. Great improvements have been made through our effort to make sustainable changes without impacting treasured colleagues, but more must be done in our overall strategy to align expenses to revenues."