Right now, about a thousand workers at Duluth-based Essentia Health are living with an axe looming overhead.
The company announced last month that it was laying off 900 employees – 6 percent of its workforce – to make up for “pandemic-related declines in patient volumes.” Profits had sagged by nearly $100 million since March, and the company expected to lose almost $3 billion in the first three months responding to COVID-19, according to a press release.
Another 850 employees would be placed on administrative leave – with benefits – until around the end of July.
But cutting that many workers takes time. Which means the United Steelworkers Local 9460 union -- which, yes, actually includes a lot of health care workers, and a broad swath of other industries -- has been in layoff meetings every single day since around the beginning of June, with more to come.
“It’s going to take several more weeks to conclude,” union veep Adam Ritscher says. “The levels of stress and anxiety are very high.”
It’s Ritscher and the union’s view that this is an unnecessary extreme. There have to be “alternatives,” he says, to laying off this many people at such a crucial time.
“Literally right now, we have [out-of-work] healthcare workers with no health insurance,” he says. “It boils the blood.”
In those frequent meetings, Essentia has insisted that the company “needs this,” and hasn’t budged on the issue. So, the union is fighting back in other ways. On Tuesday, the local’s Facebook group announced the arrival of the first few billboards protesting the layoffs.
A photo shows a big black sign that reads, in bold letters, “Essentia Health; PUTTING WEALTH OVER HEALTH; LIKE NOWHERE ELSE.”
Our billboards calling out Essentia Health for eliminating 900 jobs during a pandemic are starting to pop up in the...Posted by United Steelworkers Local 9460 on Tuesday, June 16, 2020
“Just unreal what they are putting us through,” a commenter on the post said.
A statement from Essentia says the company had taken plenty of measures to offset the revenue slump before laying off 900 people. In addition to putting workers on leave, its reduced compensation for its CEO, company leaders, and physicians – by 40, 30, and 20 percent respectively, according to the Star Tribune.
“We value every one of our colleagues,” the statement said. “That’s what made the decision to reduce our workforce as a result of the COVID-19 pandemic so difficult.”
That's despite a stimulus granted to Essentia and other healthcare systems in order to weather the pandemic. According to data compiled by Good Jobs First, which researches government subsidies granted to companies, Essentia is eligible for a grant in the neighborhood of $30 million to offset some of these costs.
Broadly, the strategies large hospitals and healthcare companies have been using to survive the upset caused by COVID-19 have drawn a lot of criticism. Mayo Clinic, located in Rochester, is receiving something like $170 million in bailout funds, according to Good Jobs First and the New York Times, but is still furloughing or reducing the working hours of 23,000 employees.