Texas Children’s Hospital is laying off 5% of its workforce

HOUSTON – The Houston Chronicle reports that Texas Children’s Hospital said Tuesday it is laying off 5% of its workforce amid a series of financial challenges for the nation’s largest children’s hospital. The hospital declined to provide a specific number of employees being affected by layoffs, but Executive Vice President and Chief Human Resources officer Linda Aldred said in an interview that Texas Children’s has approximately 20,000 employees across 120 locations in Houston, across Texas and around the world. A 5% reduction in that workforce would cut roughly 1,000 jobs. Multiple factors, including lower patient volumes in Houston and a two-week delay in the opening of the new Austin campus, contributed to the hospital reporting an operating income loss of nearly $200 million through the first six months of its current fiscal year.

Aldred said the layoffs are the result of what she characterized as “historic financial challenges” within the health care industry. She said Texas Children’s took other measures before determining layoffs were necessary; for example, the hospital has reduced the size of its executive leadership team and plans to cut executives’ compensation this year. “This has been so challenging and so difficult for us to get here. We have been really thoughtful about it,” Aldred said. “We plan to communicate these changes (Tuesday), and we do not plan to have additional cuts or job eliminations.” Aldred said Texas Children’s does not anticipate the cuts will affect patient care. The layoffs come about one month after Fitch Ratings, one of the three major credit rating agencies, downgraded Texas Children’s bond rating to AA- from AA after the hospital reported operating income losses of $198.1 million through the first six months of fiscal year 2024. Texas Children’s issued bonds to fund its growth and facility renovation projects, including construction at the new $450 million Austin campus and an expansion in women’s services. The hospital previously announced a $245 million expansion of its Pavilion for Women in the Texas Medical Center.