By Deena Beasley
(Reuters) – Hospital operator Tenet Healthcare Corp <THC.N> has put around 10% of its workforce on furlough due to a reduction in elective surgeries and other services brought about by the coronavirus outbreak, according to a letter sent to employees on Wednesday.
Tenet, with about 113,000 employees, said most of the furloughs involve staff in administrative, corporate office and ambulatory care center jobs. Less than 3% of its hospital workers are being furloughed.
Shares of Tenet, which confirmed the contents of the letter, fell more than 5%.
The Dallas-based company operates 65 hospitals and about 500 other healthcare facilities, including surgery centers.
“All of our ambulatory centers and certain hospital units which were not needed for this crisis have been closed or significantly ramped down,” Tenet Chief Executive Ron Rittenmeyer said in the letter reviewed by Reuters and reported here for the first time.
He said the furloughs will have no effect on care for COVID-19 patients, or any other emergency or medically necessary care at Tenet’s hospitals.
Several states, including New York, New Jersey and Washington, have required hospitals to halt lucrative elective surgeries in order to focus on intensive care for patients infected with the new coronavirus.
The U.S. death toll from COVID-19, the highly contagious respiratory illness caused by the virus, topped 25,700 on Tuesday, out of more than 600,000 known U.S. infections, according to a running Reuters tally.
Tenet earlier this month withdrew its previously announced outlook for first quarter and full-year 2020 financial results, citing continued uncertainty due to the outbreak.
Wall Street analysts expect the company to post first-quarter net income of $39.7 million on revenue of $4.67 billion, according to IBES data from Refinitiv.
Hospital administrators have said high-margin services, such as orthopedic and heart procedures, can account for up to 80% of revenue, while infectious disease and intensive respiratory treatments are less profitable.
The American Hospital Association earlier this month warned of “a historic financial crisis” at U.S. hospitals, where “virtually all regular operations have come to a halt.”
Tenet said it would continue to cover health insurance premiums for furloughed employees, who will be eligible for unemployment benefits. The company also has a fund for employees who have experienced hardship.
Rittenmeyer said he would donate 50% of his April-June salary to that fund, while other Tenet executives would donate 10% to 20% of their salaries.
Shares of Tenet were down 98 cents, or 5%, at $19.22 on the New York Stock Exchange.
(Reporting by Deena Beasley; Editing by Christopher Cushing, Jonathan Oatis and Richard Chang)
