Seattle Children's hospital plans to lay off 154 staffers this fall, citing looming cuts in state and federal funding that total millions of dollars over the next several years.
The changes will mean some teams will be restructured and some services will be discontinued or scaled back, the hospital's executive leadership team wrote in an email to staff Tuesday. That includes delaying expansion plans at four regional sites, closing playrooms at regional clinics and cutting nearly 20% of administrative services, among other changes, leaders wrote.
We are making some difficult but necessary decisions to secure Children’s future and protect our ability to deliver compassionate care and life-saving research for the patients and families who need us," a hospital spokesperson said in a statement Wednesday.
About 1.5% of all workers will be laid off, the statement said. Children's has about 10,261 employees.
Of the 154 staff members affected, 133 work in administrative roles, the spokesperson said. About 15 are "likely to be in contact with patients on a regular basis," but do not provide direct care, she said. About six provide direct patient care.
In addition, Children's will eliminate about 350 open roles, the spokesperson said.
The layoffs will hit locations in Seattle, Bellevue, Everett, Federal Way and Kennewick, according to the state Employment Security Department.
The timing of all of the layoffs was not immediately clear.
The Tuesday email to staff pointed to reductions in funding from Medicaid, National Institutes of Health research and the state's hospital reimbursement program, known in Washington as the safety net assessment program, which aims to close gaps in hospitals' Medicaid reimbursement rates.
The hospital is also struggling with other insurance payment delays, higher labor and supply costs and changes in taxes, the email said.
"Adapting during such a tumultuous time is challenging, but our team has weathered storms before and demonstrated our resilience," leaders wrote in the email. "Children’s will continue to invest in people and programs to meet the needs of the communities we serve."
Children's announced similar widespread layoffs in 2023, when the hospital cut about 135 roles in a "management restructure," according to the Puget Sound Business Journal. At the time, Children's attributed the decision to financial losses related to the COVID-19 pandemic, as well as inflation and "economic uncertainty, the Business Journal reported.
Other health care institutions locally and nationwide have also struggled financially since the pandemic — challenges that seem to have worsened throughout the year as hospital systems prepare for cuts to their Medicaid reimbursements and other federal losses.
In March, Valley Medical Center in Renton announced plans to lay off 101 nonclinical staffers, and a few months later closed a handful of outpatient clinics and two inpatient units in South King County. The hospital also blamed state and federal funding losses, including low reimbursement from government insurance programs.
Virginia Mason Franciscan Health has also confirmed cuts, laying off more than 100 employees who worked in virtual care over the summer.
Children's leaders told staffers that laid-off employees might still be able to apply for another job at the hospital, and will be provided with a list of open positions weekly.
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