Duluth-based Essentia Health cuts 500 employees as revenue dries up

DULUTH – Essentia Health has placed 500 employees on unpaid leave as it runs low on funds before an expected crush of COVID-19 cases.

"Like other health care organizations around the country, we are projecting a 20-40% decrease in revenue due to pandemic-related declines in patient volumes," the Duluth-based health system said in a news release Monday evening. "Staffing levels will continually be evaluated and adjusted as needs evolve."

Essentia is the largest employer in Duluth with more than 6,000 employees. The leave affects nonmedical employees across the organization, which total 14,500.

After the state mandated an end to elective surgeries and nonessential appointments to make room for the fallout of the pandemic, Essentia said it has faced a "significant financial impact."

St. Luke's took similar steps last week, sending seven workers home and asking others to reduce their hours. Essentia had already begun restricting new hires and has closed several clinics.

"We recognize and regret the hardship this uncertainty will have on our co-workers and their families," CEO David Herman said.

So far just one patient with COVID-19 has been hospitalized out of St. Louis County's 12 confirmed cases. The county's public health director, Amy Westbrook, said in a statement, "we continue to assume there are more cases here than what is confirmed due to limited testing."

Brooks Johnson • 218-491-6496