Providence Announces Second Round of Layoffs in 2025

The move marks the second round of layoffs in 2025 and follows prior cost-saving measures, including executive team reductions and a freeze on nonclinical hiring.

Renton-based nonprofit health system Providence has laid off 600 employees this week as part of a system-wide restructuring.

The move marks the second round of layoffs in 2025 and follows prior cost-saving measures, including executive team reductions and a freeze on nonclinical hiring.

According to Providence, the decision was driven by ongoing economic challenges, including proposed cuts to Medicare and Medicaid, increasing supply and labor costs, and delayed or denied insurance payments. The layoffs primarily impact nonclinical, administrative functions, though some patient care roles were affected.

The 51-hospital system began in 2025 by cutting 46 executive positions to enhance operational focus under its new CEO, Erik Wexler. In April, Providence also announced a freeze on nonclinical hiring and reduced discretionary spending, including future sponsorships and nonessential travel.

Financial pressures mount as system struggles to break even

Providence, which had not posted a profit in four years, was expected to break even in 2025. However, Wexler stated earlier this year, “We were finally on track to break even this year. But just as we were nearing that goal, the external economic conditions in 2025 took a sudden turn.”

The health system cited $500 million in losses from federal cuts and projected an additional $1 billion in annual losses if Congress passes further cuts. Tariffs are also expected to raise supply costs significantly. In addition, new state-level regulations, including charity care laws and staffing mandates in Oregon, have reduced revenue while increasing expenses.

“These difficult but necessary steps are part of a comprehensive approach to financial sustainability that will enable our family of organizations to better reinvest in and revitalize the front lines of care, including the people, programs, equipment, and facilities needed to serve our communities,” said Darryl Elmouchi, COO of Providence.

Other nonprofit systems, such as Mass General Brigham, have also implemented major layoffs this year, though Providence opted for a phased-in strategy. Andy Challenger, SVP at Challenger, Gray & Christmas, noted this approach may help with precision but can affect morale: “It does have a legitimate effect on people’s psyche, on their morale and on their willingness to stay at the company.”

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