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News » Cleveland Clinic cuts 114 jobs amid soaring costs

Cleveland Clinic cuts 114 jobs amid soaring costs

cleveland-clinic-cuts-jobs
Photo from Cleveland Clinic

OHIO, UNITED STATES — Nonprofit healthcare system Cleveland Clinic announced the elimination of 114 administrative management positions due to ongoing financial pressures. 

Despite serving a record 15 million patients in 2024 and generating nearly $16 billion in revenue, the system reported a 1.7% operating margin—falling short of its 2.7% target.

CEO Tom Mihaljevic attributed the shortfall to several unexpected cost increases, including a $370 million rise in charity care expenses, reduced drug discounts, and surging malpractice insurance premiums. 

Layoffs reflect industry-wide trends

The job cuts represent approximately 3% of Cleveland Clinic’s administrative workforce and affect nonclinical roles across various departments. Impacted employees have been offered opportunities to apply for other roles within the organization or accept severance packages.

This move mirrors broader trends in the healthcare industry, where about 40% of hospitals nationwide reported financial losses in 2024 due to inflation, labor shortages, and rising operational costs.

Exploring cost-saving strategies

As Cleveland Clinic seeks to balance its financial challenges with its commitment to patient care, outsourcing non-core functions could be a viable solution. Delegating administrative tasks to specialized providers may reduce operational costs while enabling staff to focus on direct patient care. 

Additionally, outsourcing offers scalability and access to advanced technologies without requiring significant internal investments.

The organization is also investing in automation and digital tools to streamline operations. Initiatives like AI-powered staffing management and virtual care programs are part of its strategy to enhance efficiency while maintaining service quality.

Financial outlook and innovation

While financial pressures persist, Cleveland Clinic has shown improvement over previous years. Its 1.7% operating margin for 2024 marks progress compared to 2023’s 0.4% and 2022’s -1.6%. The system continues to expand its footprint globally, with plans for new facilities and innovations like its Florida-based “Hospital at Home” program.

“This type of decision is never easy,” Mihaljevic said regarding the layoffs. “But we must continue finding efficient ways to provide care while reducing costs.”

Cleveland Clinic currently employs approximately 83,000 people worldwide and remains committed to recruiting frontline caregivers while adapting to an increasingly challenging healthcare landscape.

Read more here.

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