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Penn Medicine axes administrative jobs to save $40 million annually

Penn Medicine

Penn Medicine will cut a small number of jobs as part of a restructuring to reduce its overhead costs by $40 million annually.

Kevin Mahoney, CEO of the University of Pennsylvania Health System, told the company's 49,000 staff the changes in a memo sent last week.

He said the health system will eliminate a "small number of administrative positions which no longer align with our key objectives."

Read More: Zulily carries out second round of layoffs as revenue declines

Penn Medicine officials were unable to disclose the exact number of staff cuts.

Mahoney noted in his memo that "many" of those affected will be transferred to other positions within the health system.

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Others will be given coaching and support to help them find employment outside of the organization.

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The healthcare firm has also taken several initiatives to cut overhead expenses.

It includes renegotiating vendor contracts, standardizing technologies, consolidating enterprise-wide corporate services, and removing duplicative administrative systems.

However, it is trying to boost revenue by negotiating for higher reimbursement rates from its commercial insurance partners this summer.

Source: The Business Journals

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