Jefferson and Lehigh Valley Health Network Announce Layoffs Following Merger

In a significant development for the healthcare industry in Eastern Pennsylvania and Southern New Jersey, Jefferson Health and Lehigh Valley Health Network have announced plans to lay off 271 employees over the next few months. This move comes approximately five months after the two organizations merged to create a 32-hospital system with an expected annual revenue of $15 billion.

Layoff Details and Merger Impact

Jefferson Health will be letting go of 171 employees effective March 10, according to a Pennsylvania Worker Adjustment and Retraining Notification filed last month. Concurrently, Lehigh Valley Health Network plans to cut about 100 positions. These reductions, while impacting less than 1% of the combined workforce of 65,000 employees, signal a shift towards increased operational efficiency promised during the merger.

The merger, which took place in August, brought Lehigh Valley Health's more than 20,000 employees under Jefferson's umbrella, creating a substantial healthcare entity serving patients across a wide geographic area. At the time of the merger, executives touted the potential for improved care through enhanced efficiency and innovation.

Operational Changes and Industry Trends

While the layoffs are relatively small in scale, they reflect a broader trend in the healthcare industry. A recent Deloitte survey indicates that executives are considering outsourcing or offshoring administrative functions in 2025 to cut costs. In line with this trend, Jefferson plans to transition a "limited number of non-patient facing administrative functions to an external partner to enhance efficiency," according to a spokesperson.

Lehigh Valley Health, however, stated that their decision to reduce staff was unrelated to the recent merger and that the work "began well in advance of our combining with Jefferson Health." The health system also emphasized that they are not outsourcing labor.

Both health systems have a history of restructuring and staff reductions. In 2023, Jefferson consolidated five operating divisions into three, resulting in job cuts. Similarly, Lehigh Valley eliminated approximately 240 positions in the same year during an organization-wide restructuring and further reduced staff in April 2024 when it discontinued chiropractic services.