Pikeville Medical Center announces layoffs

Nearly 100 people lost their jobs Friday in Pikeville.

Pikeville Medical Center announced Friday afternoon that around 130 positions have been eliminated at the hospital. PMC President and CEO Donovan Blackburn said the hospital was “overstaffed” and is experiencing a “financial crisis.”

Blackburn said of the 130 positions eliminated, 30 were eliminated through attrition, while 99 current employees were laid off Friday afternoon. Blackburn said the overstaffing of the hospital began following the opening of the hospital’s clinic building.

Blackburn said during 2014 and 2015, the clinic opened and new services were added, and the hospital saw exponential growth, with more growth projected for 2016. The hospital projected a need for 582 new positions, and around 900 current employees received pay increases.

Blackburn said 2016 ended up being the hospital’s most successful year ever financially.

Fast forward to 2017, the hospital experienced its worst ever financial year, and was operating in the red.

Blackburn said that projected growth through 2016 never came. He added that there was hope that attrition would bring down the employee count at the hospital, but that also didn’t happen on a scale large enough to bring the hospital back into the black financially.

Pikeville Medical Center President and CEO Donovan Blackburn

Blackburn said the hospital had 260 too many employees, and it could wait no longer to act, especially after the hospital’s bond rating was lowered by two points.

On Friday, the hospital informed 99 employees they were being laid off.

Blackburn said the affected staff members are mostly non-clinical staff, but some clinical positions were cut. He did not specifically state that those affected were staff members who were hired in 2016. One former employee who reached out to EKB News Friday said she worked at PMC for 29 years, and was told by hospital officials she was selected to be laid off based upon “a number of factors.”

Of those laid off, Blackburn said, there “were too many employees and not enough work for them.”

Those affected by the layoffs were offered a two-week severance package, as well as the opportunity to keep their insurance coverage at the hospital throughout the month of June. The layoffs, he said, came after a study conducted last year regarding the hospital’s finances, which showed the overstaffing issue.

Blackburn said other steps have been taken to save the hospital money.

He also said the hospital is continuing to grow, services and specialties are continuing to evolve and hiring will continue to accommodate that growth. He added that he hopes some of those laid off Friday would be called back as part of that projected growth.

Blackburn stressed that the hospital is on good financial footing with its reserves and is in no danger of closing its doors or retracting its services.

Pikeville Medical Center still stands as the region’s largest employer, with more than 3,000 employees.

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