Jefferson Health confirmed it is laying off roughly 1% of its workforce, or about 650 of its 65,000-person head count.
The news comes a couple of months after the Philadelphia-based academic organization posted a nearly $200 million operating loss for its latest fiscal year.
It’s also not too far off from closing its major acquisition of Lehigh Valley Health Network, back in August 2024, the latest in a decade-long stream of merger deals that swelled the organization to 32 hospitals. Jefferson had already cut 171 workers in January by outsourcing several back-office functions after the merger, and before, it that had cut around 400 as part of a 2023 restructuring.
“Like many organizations in healthcare and higher education, we are facing significant financial headwinds,” Joseph G. Cacchione, M.D., CEO of Jefferson, said in a statement. “To sustain our mission and continue serving our communities, we must take thoughtful, strategic actions to align our operations for the future. While these decisions are never easy, they are necessary to ensure Jefferson remains strong and able to invest in expanding access to care, advancing innovation and supporting those who rely on us most.”
Jefferson’s statement on the layoffs did not specify any timeline for the eliminations or detail whether those affected will be receiving extended benefits or severance.
Thomas Jefferson University, Jefferson Health’s parent, reported a $195.5 million operating loss (-1.2% operating margin) for the fiscal year ended June 30, 2025, as opposed to the $1.3 million operating income (0.0% operating margin) of the prior fiscal year.
Though the most recent year included 11 months of operations from Lehigh Valley Health Network, comments from management in the year-end financial filings pointed to a substantial performance swing within its 370,000-member Jefferson Health Plan, where a $100 million gain in fiscal 2024 flipped to a $169.9 million loss in fiscal 2025.
The shift was “driven by GLP-1 pharmaceuticals and medical expense trends outpacing premium increases,” management wrote while also noting that “overall inflation has increased the cost of providing care and has outpaced the increase in payer rates.”
Thomas Jefferson University reported $15.8 billion in total revenues in fiscal 2025, up from $10 billion in large part due to its merger. Similarly, the organization’s total licensed beds grew year over year from 3,819 to 5,690, and total outpatient visits increased from 1.1 million to 2.8 million.
In a rating action note shared earlier this week, Fitch Ratings affirmed its “A” rating for Jefferson Health’s bonds but revised its broader rating outlook from “stable” to “negative.”
Commentary on the decision acknowledged Jefferson’s pressured operations and limited ability to improve reimbursement rates in the near term, but was largely complimentary of the organization’s strategic plan and expectation of steady demand due to its leading market positions. The agency described the Lehigh Valley Health Network deal as operationally accretive and said it expects the organization’s position to improve in the coming years.