Healthcare job cuts increase 97% from 2022

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Healthcare companies and health-centric product manufacturers have seen job cuts in their industry increase 97% since the first six months of 2022, ranking it fourth among all industries in terms of the number of job cuts during the first half of this year.

That's according to new data released by global outplacement and business and executive coaching firm Challenger, Gray and Christmas.

Overall, the healthcare sector saw 38,279 job cuts over the course of the past six months. By comparison, the first six months of 2022 saw just 19,390 job cuts in the industry.

WHAT'S THE IMPACT

The report examined 30 industries, with healthcare ranking near the top in sheer job cuts. 

The technology sector topped the list this year with 141,516 job cuts, up 2,353% from the 5,769 cuts announced in the same period last year. That's the second-highest total ever for the tech sector, topped only by 2001.

Retail companies came in second with 48,212 job cuts, a 718% increase from the front half of 2022. Financial firms announced the third-most cuts so far in 2023 with 39,768, up 268% from the year prior.

According to the firm, market/economic conditions were the top reason for job cuts so far this year. Almost 217,000 cut jobs were attributed to this reason. Another 55,088 were attributed to cost cutting, while 54,864 were due to store, unit or department closings. Voluntary severance was attributed to 9,917.

The healthcare numbers may be inflated slightly by the closing of a hospital last month, which was linked to a cyberattack a few years ago, the report found. The report did not name the hospital.

U.S. employers announced plans to add 115,462 positions so far in 2023, the lowest first-half total since 2016, when 76,751 new hires were recorded, the data showed.

THE LARGER TREND

The news is mixed for nonprofit hospitals. Though the industry as a whole has lost jobs, a Fitch Ratings report earlier this year found hospital and ambulatory healthcare services payrolls have risen for 14 and 26 consecutive months, respectively, as of March.

Monthly job additions are also up 15,150 and 24,300 per month, respectively, between March 2022 to February 2023. This, said Fitch Ratings Director Richard Park, points to the potential of alleviating labor market pressure.

The improving picture also extends to nursing facilities, which have been plagued by severe staff shortages the last several months. While still high, nursing facilities reported shortages of 17.3% and 17.7% of nurses and aides, respectively, through the end of February. These figures are well below the peak in January 2022, when 28.3% and 29.8% of nursing facilities reported shortages of nurses and aides.

Though the labor situation is improving, the cost of that labor is still quite high. Recent data published by Syntellis and the American Hospital Association show that contract labor expenses for hospitals shot up 258% from 2019 to 2022, which is linked to long-standing labor shortages in the industry.

Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com