Children’s Hospital Los Angeles announced in late August that it would cut 439 positions amid “growing financial challenges.”
Among those impacted, 253 jobs will be eliminated, while 186 employees will be offered new roles within the hospital as it undergoes a company-wide restructuring, the hospital said in a statement. In total, nearly 6% of the workforce will be impacted. The layoffs reach as far as administrative, management and support departments. Notably, around 63% of the eliminated positions are among the nursing staff, according to hospital’s layoff notice.
The move is yet another in a string of cost-cutting measures taken by Children’s Hospital, which has also implemented hiring freezes and programs to reduce costs for hospital supplies.
“It became increasingly clear that reductions to both team member and management roles were necessary to ensure Children’s Hospital Los Angeles can continue to survive in this uncertain climate to provide our young patients and their families with the quality care that they need and deserve,” Paul S. Viviano, the chief executive at Children’s Hospital, said in a statement.
The company cited years of low treatment reimbursement rates from Medi-Cal (the state’s Medicaid program) as one of the many financial pressures plaguing the hospital. Those reimbursements could fall further as nearly $1 trillion in Medicaid cuts approved by Congress this summer as part of President Donald Trump’s budget plan take effect over the next year or two. Based on 2022 filings with the California Department of Health Care Access and Information, 68% of the CHLA inpatient revenue and 61% of the clinic’s outpatient revenue came from Medicare and Medi-Cal.
According to the Association of American Medical Colleges, the cuts would increase the number of uninsured patients that still need to show up to the hospital when they’re sick. The George Washington University Milken Institute of Public Health said Medicaid funding cuts would result in around 477,000 jobs being cut from the health care sector.
“Medicaid and SNAP programs are not just designed to strengthen individual health and nutrition – they support the economic well-being of communities and businesses nationwide,” Leighton Ku, lead author and director of the Center for Health Policy Research said in a statement. “Cuts of this magnitude will not be harmless. In fact, such drastic reductions would harm millions of families and also trigger widespread economic instability and major job losses.”
It’s not the first time CHLA had to contend with the Trump Administration’s consequential policy changes. Over the summer, the company shuttered its gender-affirming care unit – one of the country’s largest gender-affirming care departments – amid threats by the federal government to withhold funding during its ongoing campaign against transgender rights.
Hospitals all over Los Angeles are grappling with a new financial reality. About half of the 75 largest hospitals in Los Angeles County reported negative operating margins in 2024, according to the Business Journal’s annual list. CHLA reported an operating margin of -9.9% in 2023, and a -6% operating margin in 2024, according to the state.
