Oregon Health to lay off 500 workers amid merger
OREGON, UNITED STATES — Oregon Health and Science University (OHSU) announced its plans to lay off at least 500 employees in the wake of its recent merger with Legacy Health.
The merger, finalized in late May, created the largest employer in Portland, with over 30,000 workers. However, rising costs have necessitated significant workforce reductions.
Financial pressures and strategic alignment
In an email sent to employees, OHSU executives outlined the need for layoffs as part of their ongoing “strategic alignment work.”
OHSU leadership cited escalating expenses, including supplies and labor costs, as outpacing the health system’s revenue. The institution plans to discuss the cuts further with staff following its annual “review and contract renewal process.”
“While we work to address short-term financial challenges, we must also plan for an impactful and successful future,” OHSU President Danny Jacobs and other executives wrote in the email.
They acknowledged that the recent merger with Legacy Health, while promising, raises questions about financial sustainability.
Union criticism and executive compensation
The layoff announcement has drawn criticism from unions representing OHSU workers. Jennie Olson, president of American Federation of State, County and Municipal Employees Local 328, called the move “outrageous and immoral” given the recent increase in retirement benefits for OHSU President Danny Jacobs.
Jacobs’ total compensation, including a $350,000 annual retirement increase, has been a point of contention among staff.
“OHSU needs to prioritize patients and people instead of lining the pockets of people in ivory towers,” Olson added.
Capital commitment and funding
Despite the financial challenges, OHSU has committed to a capital investment of approximately $1 billion over the next decade to expand joint services with Legacy Health.
This investment will be funded through 30-year bonds, which cannot be used for the fiscal year 2025 budget or payroll.
The merger between OHSU and Legacy Health is also expected to have significant implications for the Portland healthcare landscape. The combined entity will operate 12 hospitals and over 100 healthcare locations, serving more than 3 million patient visits annually.
The integration aims to improve access to care, enhance service quality, and address healthcare inequities across Oregon and Southwest Washington.
