Coronavirus in Texas: Baylor Scott & White to lay off 1,200 employees

Employees at Baylor Scott & White Health, one of the largest hospital systems in Texas, are now facing layoffs, furloughs and pay cuts as the health care provider struggles with the economic impact of the coronavirus pandemic.

The nonprofit hospital said Tuesday it will eliminate about 3% of its workforce, or about 1,200 workers.

The hospital system did not say exactly how many — or for how long — employees would be put on furloughs and reduced pay.

The system employs at least 2,000 people in the Austin area, according to the Greater Austin Chamber of Commerce website. Baylor Scott & White did not say Tuesday how the layoffs would affect its Austin area facilities.

Senior executives at the company, about 260 in total, also will be taking temporary salary reductions, while physicians will work under new compensation models, the system said.

A Baylor Scott & White spokesman told the American-Statesman that the temporary pay cuts for senior executives could range between 10% to 20%, while the CEO and president of the organization will each take a 25% reduction in salary.

Physicians will take temporary pay cuts of about 10%, the spokesman said.

The spokesman said Baylor Scott & White will adjust furloughs and employee work schedules to match patient volume, and added that the “vast majority” of the layoffs would not affect bedside caregivers who work closely with COVID-19 patients.

“In fact, in June we are further investing in team members on the front lines by implementing an hourly pay increase for nearly 12,000 nurses and other staff — a commitment we made prior to the pandemic’s impact,” he added.

The staff reductions and temporary pay cuts are due to the financial burdens caused by the coronavirus pandemic, according to the health system.

“We worked to reassure and safeguard our people through the uncertainty as we prepared for a potential surge of COVID-19 patients, yet experienced a drastic drop in visits, largely due to the suspension of non-urgent surgeries and procedures,” the system said in its Tuesday news release.

Baylor Scott & White is not the only Texas hospital system that has taken a financial hit from the coronavirus crisis.

St. David’s HealthCare announced last month that it is temporarily closing multiple facilities because of the drop in patient volume during the pandemic. It has also reduced work hours for some of its employees.

St. David's President and CEO David Huffstutler said about 6,400 employees with reduced hours have been receiving 70% of their regular salary since late March.

Huffstutler said corporate employees at the health system also have taken temporary pay reductions of 10% to 20%. He has taken a 30% pay cut, he said.

“These efforts have enabled St. David’s HealthCare to avoid the layoffs and furloughs that many other organizations are experiencing,” Huffstutler said in a written statement.

Waco-based economist Ray Perryman said the health care industry as a whole has experienced a significant decrease in the demand for certain specialized services, such as certain types of surgery and diagnostic procedures.

“Unfortunately, many of the activities that we postponed were also those which are the key sources of revenue for the sector,” Perryman said. “The need for health care is, of course, not permanently reduced, and once the economy can fully reopen and patients resume normal patterns, we should see demand accelerate and these jobs return.”

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