Rothman is laying off 5% of workforce, citing market forces and determination to stay independent

Rothman Orthopaedic Institute is reducing its workforce for the second time in a year, with plans to cut 5% of positions across the organization.

With a total staff of about 1,800 people, that makes for about 90 positions cut throughout Rothman’s 38 locations in Pennsylvania, New York, New Jersey, and Florida. The layoffs began Monday, a spokesperson said.

This reduction is more significant than the last. The company laid off 18 corporate service employees in March, citing a restructure in the face of “spiraling costs.”

“After reviewing the market, it became clear that we need to shift resources where they appropriately align with our strategic vision of enhancing the patient experience,” spokesperson Alexandria Hammond said in a statement Tuesday. “When market forces improve, we will be in a better position to grow our increasingly unique model.”

The Philadelphia Business Journal first reported the layoffs on Tuesday.

Hammond’s statement noted greater challenges within the health-care industry, including inflation, labor costs, and other medical care expenses outpacing reimbursement for services. Partly because of these forces, the statement said, four other Philadelphia-area orthopedic groups were sold in 2023.

“Rothman believes that physician independence is a key part of what makes the patient experience special and has allowed our organization to thrive for over 50 years as leaders in the field and community service,” Hammond said. “We are committed to sustaining that independence in the future.”

Market forces aren’t the only challenges Rothman has faced in the past year. The company fired CEO Christopher Olivia in late March, not long after the 18 corporate layoffs.

Olivia then sued Rothman in October, alleging that he was wrongfully terminated for blowing the whistle on financial mismanagement of the business. Rothman filed a countersuit in November, alleging that it does not owe Olivia severance because he violated his employment agreement.

According to Olivia’s lawsuit, the company has about $400 million in annual revenue and is owned by 90 physicians.

Rothman has also drawn attention in the past year for how it handled allegations of sexual assault and discrimination involving one of its former surgeons.