, Salem, MA


August 18, 2010

Beverly Hospital sees another round of layoffs

CEO warns actions 'only the beginning'


The corporation determined who to lay off based on information from FTI Consulting Inc., and that firm's recommendations were given the green light by senior management, according to a letter sent to all employees by Northeast Hospital Corp. CEO Ken Hanover.

"Unfortunately, this week is only the beginning of what will likely be a three-phase process, which will be implemented during the next four to eight months," reads Hanover's letter, dated yesterday. "... I recognize the anxiety a prolonged process will create within our work force, however, changes must be implemented with caution and care necessary to ensure their appropriateness and sustainability."

Hanover, who became the head of the company last October, said in a letter in late April that patient care volume and revenues have fallen behind projections since the start of the fiscal year in October. The organization is also expecting a decline in Medicare payment rates and no increases in Medicaid and private health insurance rates.

The corporation had revenues of $350 million in fiscal year 2009.

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