Providence Swedish plans to eliminate nearly 300 positions in the Puget Sound area in the next few months, the health care system announced Tuesday, citing new state taxes and federal cuts.
The decision to cut about 3.8% of the organization’s roughly 7,700 Seattle-area jobs will hit more than 100 departments at Providence Swedish’s First Hill, Cherry Hill, Ballard and Issaquah hospitals and nearby clinics. The positions are pretty evenly spread across the four hospitals and clinics, and include union and nonunion clinical, administrative, management and open roles, said Swedish Health Services President and CEO Dr. Elizabeth Wako.
“We all know health care is a broken system, and right now I’d say we’re in the middle of a perfect storm,” Wako said in an interview this week. “And it’s heartbreaking. … This wasn’t an easy decision.”
Most of the changes will go into effect in early 2026.
Providence Swedish is the latest health care organization in Washington state to announce significant layoffs this year, and similarly points to looming financial burdens on the state and federal level, including Medicare and Medicaid cuts. This month, Neighborcare Health clinics laid off about 20 staffers and offered about 80 employees the option to move to other roles as part of an “organizational realignment.”
Seattle Children’s announced plans in September to lay off more than 150 staffers; Valley Medical Center in Renton cut about 100 jobs this past spring.
In Providence Swedish’s case, Wako said contributors to the difficult decision include coming reductions in Medicaid and Medicare reimbursements, new state taxes, delays in insurer payments and fewer surgeries. She specifically noted Washington’s new business and occupation tax, and caps on insurance payments to hospitals for care provided to public and school employees.
Those added expenses, plus cuts to Apple Health reimbursements, are expected to cost the hospital system around $65 million, Wako said. Then there’s the changes in coverage and insurance rates from the federal “One Big Beautiful Bill Act,” which will add up to an additional $180 million, she said.
In total, Providence Swedish is looking at a $245 million hit by 2028, Wako said.
“This is not small,” she said. “We were barely finding our way out of COVID here in Washington state. And to now turn around and be hit both federally and by the state, it’s been a lot.”
Of the 296 affected roles, 84 were open positions, according to Providence Swedish. A hospital spokesperson declined to share how many positions would be cut at each campus.
Because the layoffs affect a small number of employees across dozens of departments, Wako said patients “probably won’t see anything different.”
“We tried to look at the roles and ensure that we weren’t just removing a position, but we were changing workflows so that it didn’t increase the burden of those that were left behind,” she said.
However, people might experience some differences in surgical services, many of which have been shifted from inpatient to outpatient procedures, especially orthopedic surgeries, she said.
“As we’ve gotten better with pain management for orthopedic patients, (for) those cases that historically would have been done in a hospital and required an overnight stay, we’re able to discharge those patients and they’re able to go home” the same day, Wako said. That means patients are often able to undergo surgeries in individual surgical clinics, she said.
In addition, Providence Swedish plans to shut down its Credena Health Pharmacy at its Cherry Hill hospital on Nov. 24, and its weight loss outpatient clinic in Issaquah will close Dec. 12. Wako said those services will be shuttered because of declining demand.
The Cherry Hill hospital will still have inpatient pharmacy services.
Wako said she hopes the hospital system will not have additional mass layoffs in the near future, though she added that “it’s hard to imagine how our system will absorb” a nearly $250 million increase in taxes and cuts.
“Everything is always on the table,” she said.
The layoffs occur as Providence Swedish builds a new tower at its First Hill campus, a $1.3 billion project Wako called “essential to our organization.” She said construction is not related to the layoffs and that the hospital “won’t be able to provide care” without the new facility, which will home additional intensive care units, surgical suites and cardiac rooms, among other services.
“While it is expensive, we don’t see ourselves being in a position where we can’t continue to move forward with the tower,” Wako said.
The North Tower is estimated to open to patients in fall 2027.
Earlier this year, in a separate layoff announcement, Providence Regional Medical Center in Everett confirmed plans to cut or move about 250 staffers in a systemwide “restructure.” That decision affected employees in Everett and in Eastern Washington, including about 25% of the Everett hospital’s nursing assistants, The Daily Herald reported at the time.
Wako said this week those decisions were made separately from Providence Swedish’s layoffs.
The larger Providence organization is based in Renton, but has locations in Alaska, California, Montana, New Mexico, Oregon and Texas. Providence and the formerly independent Swedish Health Services became affiliated in 2012.
While the layoff news reflects a challenging financial situation for health care systems across the country, Wako said Providence Swedish is determined to maintain access to care for all patients.
“Our goal is to continue to live to our mission, and our mission is to be here for our community,” she said. “We have served here in Washington for 114 years. We anticipate to serve for another 114 years.”
