Providence Swedish, the combined brand of Providence and Swedish Health Services, announced it is eliminating approximately 296 positions as the hospital system grapples with mounting financial and operational challenges affecting healthcare organisations nationwide.
Layoffs will take effect in early 2026, the organisation stated Tuesday.
The affected positions include non-represented caregivers, union-represented roles and open positions. The organisation indicated the adjustments come amidst growing financial and operational challenges. The changes include closing Credena Health Pharmacy at Cherry Hill and the Swedish Weight Loss Outpatient Clinic in Issaquah. Credena Health Pharmacy will close 24 November and the Swedish Weight Loss Outpatient Clinic will close 12 December.
“These are tough and complex, but necessary, decisions to address the significant economic pressures facing healthcare today,” stated Dr. Elizabeth Wako, president and CEO of Swedish Health Services, in a press release. “Whilst layoffs are never our first choice, they are needed to sustain this organisation.”
The organisation indicated it is dealing with multiple obstacles, including state and federal Medicaid cuts, commercial insurer denials and programmes affected by the One Big Beautiful Bill Act, citing rising costs and “declining procedural volumes.”
Providence Swedish stated it has implemented “effective plans over the past seven months”; however, the organisation indicated it must “adapt swiftly” to the volatile healthcare landscape. The company also clarified that the layoffs are not connected to their current construction project in First Hill.
“These reductions are part of an ongoing evaluation process,” Wako stated. “We remain focused on our mission and values, making thoughtful decisions to navigate financial pressures responsibly. Our organisation’s strength lies in its dedicated people, and together, we will emerge stronger and ready to meet future challenges.”
The announcement of 296 position eliminations at Providence Swedish reflects the severe financial pressures confronting healthcare systems nationwide as they navigate a confluence of challenges including reduced government reimbursements, increasing commercial insurance denials, rising operational costs, and changing utilisation patterns that have left many hospitals operating with thin or negative margins.
The early 2026 effective date for the layoffs provides affected employees several months’ advance notice, allowing them time to search for alternative employment, arrange benefits transitions, and prepare financially for job loss. This extended notification period exceeds the federal WARN Act requirement of 60 days’ notice for mass layoffs, suggesting the organisation is attempting to soften the impact on employees even as financial realities force workforce reductions.
The inclusion of both non-represented caregivers and union-represented roles in the cuts indicates the financial pressures are sufficiently severe that the organisation cannot limit reductions to non-union positions typically easier to eliminate. Cutting union positions requires navigating collective bargaining agreements that may specify seniority-based layoff procedures, bumping rights allowing senior employees to displace junior workers in other positions, and severance provisions that increase the cost of workforce reductions.
The elimination of open positions alongside filled roles suggests Providence Swedish is both laying off current employees and freezing hiring for vacant positions, a dual approach that reduces workforce size whilst limiting the number of individuals who lose employment. Eliminating unfilled positions creates operational challenges by reducing staffing flexibility and potentially increasing workload for remaining employees who must absorb duties previously performed by eliminated positions.
The closure of Credena Health Pharmacy at Cherry Hill and the Swedish Weight Loss Outpatient Clinic in Issaquah represents strategic decisions to exit specific service lines that presumably operate at losses or fail to generate sufficient revenue to justify continued investment. Pharmacy operations face particularly intense margin pressure from pharmacy benefit managers that dictate reimbursement rates, whilst weight loss clinics compete with newer medications like semaglutide that patients can obtain through primary care providers without specialised clinic visits.
