Tower Health cuts corporate staff as it sheds hospitals
The Berks County nonprofit said the cuts were needed to reflect Tower's reduction in size from six hospitals to four.
Tower Health on Wednesday laid off 52 people from its corporate staff as the West Reading-based nonprofit health system shrinks through hospital closures and the pending sale of Chestnut Hill Hospital.
“These targeted reductions are in the system’s management structure only — no front-line direct caregiving positions have been eliminated,” Tower said in a statement. “It is never easy to take an action that impacts our colleagues in this way, and we thank each of these individuals for their service to Tower Health.”
The layoffs amounted to 13% of Tower’s corporate management staff of about 400 people. The move is expected to save $15 million annually, Tower said.
The Berks County system had 12,000 employees overall at the end of June.
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For two years, Tower has been trying to unwind a financially disastrous expansion into Southeastern Pennsylvania that started in 2017 with the acquisition of five hospitals from Community Health Systems Inc. for $423 million. The acquired hospitals were Brandywine, Chestnut Hill, Jennersville, Phoenixville, and Pottstown.
Tower has since closed Jennersville and Brandywine Hospitals in western Chester County. ChristianaCare bought Jennersville, which is in Penn Township near West Grove, after it was closed, for $8 million, but hasn’t yet said what services it plans to offer there.
Temple University Health System, in a partnership with the Philadelphia College of Osteopathic Medicine and Redeemer Health, has agreed to pay $28 million for Chestnut Hill Hospital. That sale is expected to be completed on Jan. 1, Temple told the Philadelphia Department of Public Health on Monday.
The Chestnut Hill sale awaits bondholder approval.
Tower management has said it intends to rebuild around its flagship Reading Hospital and the two remaining hospitals it acquired from Community Health in 2017, Phoenixville and Pottstown Hospitals. Tower also owns St. Christopher’s Hospital for Children in Philadelphia in a joint venture with Drexel University.
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Next week, Tower is expected to release its financial results for the fiscal year ended June 30. Preliminary results showed that Tower had a $195 million operating loss during that period. Tower is also expected to report financial result for July, August, and September.
Many hospitals nationwide — even those in a strong financial position — have been reporting dismal financial results for that period because of inflation and declines in the number of people being hospitalized.