The Vanderbilt University Medical Center is trimming hundreds of employees as part of a $300 million-plus reduction to its operations, the academic medical system said Friday.
A statement given by the organization said the decisions were a “response to the impact of budgetary actions in Washington, D.C. related to government-sponsored research and patient care.”
The VUMC said the cuts will hit as many as 650 employees, who largely hold research, administration or support roles. It also noted that hiring of front-line clinical staff is ongoing amid a 180-bed expansion expected to open later this year.
“While this is extremely difficult, the staffing loss represents less than 2% of VUMC's total workforce,” the system said in its statement. “To support affected employees, VUMC is providing severance packages and other assistance.”
The 650 total reportedly includes layoffs from earlier in the year and a new wave conducted Friday.
The VUMC spans seven hospitals with more than 1,700 licensed beds as well as over 180 clinics, according to its website. It’s the mid-Tennessee region’s largest nongovernment employer and fields about 3.3 million patient visits annually. The organization is also the fifth-highest recipient of National Institutes of Health (NIH) grant funding in the country.
It reported $7.6 billion in total operating revenue and $168.3 million in operating income during its most recent fiscal year ended June 30, 2024. The health system said $823 million of its 2024 revenue came from its academic and research operations, which included $438.4 million of direct federal grant revenues.
The VUMC’s most recent financial disclosures, reflecting the first nine months of its 2025 fiscal year, outline $120.3 million of operating income that slightly outpaced the same period a year prior. Nine-month academic and research revenue was also up comparatively, with $333.4 million of direct research revenues recorded from federal grants.
VUMC President and CEO Jeff Balser, M.D., Ph.D., had outlined to employees a few months back budgeting plans that would include $250 million of cuts as well as a pause on hiring in some nonclinical areas. This was described at the time as a “conservative approach, as VUMC revenue reductions of more than twice this amount are possible in the coming year,” he’d said.
Providers across the nation are sounding the alarm on federal healthcare funding cuts at the center of Congress’ budget reconciliation bill. A version of the "big, beautiful bill” passed by the House stands to bring a $42.4 billion increase in hospitals’ uncompensated care costs due to a combination of fewer insured patients and Medicaid payment shortfalls, industry group America’s Essential Hospitals said earlier this month.
The draft version of the funding bill currently working its way through the Senate could bring steeper hospital revenue cuts due to additional reductions on provider taxes states use to fund their Medicaid programs.
Academic medical centers have taken an additional hit amid the termination of nearly $2 billion in NIH grants for medical schools and hospitals, an analysis from the Association of American Medical Colleges found—though a recent court order has hundreds of those terminated grants on a potential path toward reinstatement.