Alameda County hospital system lays off hundreds of employees to counter federal cuts

A day after many Alameda Health System employees had received notices of paid leave — only to have those notices retracted Wednesday morning — scores of nurses, therapists and surgeons grilled the AHS Board of Trustees as they prepare to layoff approximately 270 workers across the county hospital network.

The notices to hospital workers come as AHS attempts to balance its budget following significant cuts to Medicaid and Medi-Cal in the Trump administration budget bill that has major implications for the county system’s rehabilitation, speech therapy and behavioral health outpatient services. But as AHS officials reckon with what health care will look like for the county’s poor and vulnerable, employees are questioning whether such a reckoning is necessary.

“The board must rescind layoffs immediately,” said Craig Metz, a psychotherapist working in behavioral health. “The services we provide can’t be found anywhere else in the county.”

The pending layoffs are expected to save approximately $30-40 million in 2026 to balance the public health system’s budget after Congress approved a $1 trillion cut to Medicaid — the largest in the health subsidy program’s history — in President Donald Trump’s budget bill. AHS is particularly vulnerable to cuts to Medicaid and Medi-Cal, the state’s supplementary health insurance provider, as approximately 60% of AHS patients utilize the programs.

According to budget projections from November, AHS had estimated a $91.7 million deficit this year, a $88.5 million deficit in 2027 and a $210.6 million deficit in 2028 before layoffs.

Health care workers like AHS dietician Reilly Gardine said they were worried about what they and their partner will do if given a pink slip. If Gardine loses their health insurance, they and their partner will have to apply to Medicaid — the same insurance that the majority of their patients have. Though Gardine did not receive a notice on Wednesday, they fear layoffs will exacerbate overwork and wait times.

“I think people are incredibly anxious, as you’re not sure if you’re on ‘the list,’ as we’re calling it. And we’re also anxious (because if) you are still employed, you’re not sure how much harder you’ll need to work,” Gardine said. “This is going to leave scars on the community, quite literally.”

The AHS Board of Trustees reentered closed session Wednesday evening at the Conference Center and Highland Care Pavilion to continue negotiating with the hospital workers union SEIU 1021.

System CEO James Jackson described upcoming layoffs as a necessary response to the loss of federal funding. Last summer, as Congress was poised to make cuts to Medicaid, Jackson and the Board of Trustees created various scenarios to prepare for the final budget, including a “nuclear option” for the worst-case scenario. When the bill was signed into law on July 4, it confirmed his worst fears.

“Initially, the thought was to cut more, because we know that it’s not just this fiscal year that we’re looking at,” Jackson said, but “we didn’t do that because we don’t know what the future holds.”

AHS employees have pushed back against the idea that the layoffs are necessary, arguing that a decision by AHS officials and the Board of Trustees is premature. Gardine cited a $20 million surplus AHS had last year — annual surpluses for AHS are reinvested to update aging infrastructure, according to AHS. — while R.N. Bryan Smith-Turner said these cuts could actually exacerbate the downstream costs of care if patients’ access to rehab, psychiatric emergency services and post-operative care is curtailed.

“We save AHS a great deal of overhead in terms of people coming in and out of inpatient systems,” said Smith-Turner, who spoke at the Board of Trustees meeting Wednesday night. “There’s going to be a lot of shortfalls in terms of bridging services.”

Some AHS employees who had received leave notices on Tuesday awoke to emails on Wednesday morning instructing them to disregard the previous message and report to work, according to emails shared with the Bay Area News Group. The emails further stated that the reduction in force still impacted employees’ positions.

Jackson remains optimistic that Medicaid cuts will spur a public backlash against lawmakers, forcing Congress to reverse Medicaid cuts before additional layoffs are necessary. He reaffirmed his commitment to AHS’s mission — “Caring, Healing, Teaching, Serving All” — saying that the hospital system would continue to care for those who walk through its doors even while budget cuts make it harder to do so.

“We are these stewards of scarce resources, and so we cannot be all things to all people,” Jackson said. “While this executive team is taking some hard steps, I am empowered by our staff, I’m grateful for them, and I’m going to do everything in my power to mitigate the impact on them while we do what we have to do to sustain our mission.”

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